Wefox grabs $400M at $4.5B valuation to counter insurance downturn trend

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European insurance technology startup Wefox raised $400 million in a Series D funding round, valuing the German company after cashing in at $4.5 billion. This represents a 50% increase at last year’s estimate of $3 billion in the C round.

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Founded in Berlin in 2015, Wefox sells a variety of insurance products through a combination of internal and external brokers, bypassing insurtech competitors’ direct-to-consumer model, which includes rival German startup Getsafe. This way of increasing user base, forcing third-party brokers to use Wefox to advise their clients, is how CEO and founder Julian Teike credits himself with helping the company double its revenue to $320 million last year. Moreover, it has already earned $200 million in the first four months of 2022, setting a goal of reaching $600 million in turnover by the end of the year, and recently 2 million customers across the board.

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To date, Wefox has said it has built a network of approximately 3,000 independent brokers in its native Germany, and has trained its own brokers in other markets such as Switzerland, Germany and Austria.

“Wefox’s secret sauce lies in its indirect distribution business model, which has allowed the company to grow faster than any other Insurtech in the world,” Teike told TechCrunch. “Our model is unique in the insurance technology industry because everything else is direct-to-consumer.”

Customer acquisition

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The main advantage of this model lies in the cost of customer acquisition, which becomes significantly lower, given that its brokers, agents and other partners do most of the preparatory work for Wefox. Moreover, it also allows Wefox to enter new markets faster.

“Then we can focus on enabling our brokers, agents and partner partners to target the most profitable clients, which will improve our loss rates and customer lifetime value,” added Teike. “Our model allows Wefox to maintain a superior financial profile, which puts us on a clear path to profitability.”

The approach is based on the basic notion that insurance is inherently a complex topic and people prefer to interact with a person and receive personalized advice. And only then do technologies come into play with all the usual mobile applications and online panels for registration and filing claims.



Few industries are immune to an economic downturn, and insurtech is no different. Just in the last month Policygenius cuts a quarter of its staff shortly after raising $125 million, while Next Insurance cuts costs by about 17%. In the other place, master from public insurance companies are trading well below their original IPO price, including Root, Hippopotamusas well as Lemonadethe latter also reportedly fired part of his staff back in April.

On the other hand, we have seen a little huge investment in insurance technology, and Branch recently raised $147 million Series C tranche at a valuation of $1.05 billion, while YuLife made $120 million at an $800 million valuation last week alone. Throw in the mix constant flow from less investment into space, and it is clear that even if 2022 does not follow in the footsteps of the bumper year 2021, insurtech not quite dead in the water.

From Wefox’s point of view, it’s only been a year since the company raised $650 million in funding, so it’s hard to imagine that it could burn that much money in such a short period of time. And apparently not – according to Teike, he wasn’t desperate to raise money again, he was just preparing for the future if he needed funds.

“We no longer need cash, however we were approached by investors after our Series C round and in the current economic climate we believe it was wise to take stock and take advantage of the current economic downturn because we see this as an opportunity to grow even faster,” Teike said.

Wefox’s Series D round, which is compromised by equity and leverage, was led by investment firm Mubadala, with participation from LGT, Horizons Ventures and Omers Ventures. With cash, the company said it plans to enter new European markets in 2022, and longer term plans to enter the US and Asian markets in 2024.

Credit: techcrunch.com /

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