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

European insurance coverage expertise startup Wefox raised $400 million in a Series D funding spherical, valuing the German firm after cashing in at $4.5 billion. This represents a 50% enhance at last year’s estimate of $3 billion within the C spherical.

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Founded in Berlin in 2015, Wefox sells quite a lot of insurance coverage merchandise by means of a mixture of inner and exterior brokers, bypassing insurtech rivals’ direct-to-consumer mannequin, which incorporates rival German startup Getsafe. This method of accelerating consumer base, forcing third-party brokers to make use of Wefox to advise their shoppers, is how CEO and founder Julian Teike credit himself with serving to the corporate double its income to $320 million final yr. Moreover, it has already earned $200 million within the first 4 months of 2022, setting a purpose of reaching $600 million in turnover by the tip of the yr, and not too long ago 2 million customers across the board.

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To date, Wefox has mentioned it has constructed a community of roughly 3,000 impartial brokers in its native Germany, and has skilled its personal brokers in different markets akin to 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 informed Thealike. “Our model is unique in the insurance technology industry because everything else is direct-to-consumer.”

Customer acquisition

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The foremost benefit of this mannequin lies in the price of buyer acquisition, which turns into considerably decrease, provided that its brokers, brokers and different companions do many of the preparatory work for Wefox. Moreover, it additionally permits Wefox to enter new markets sooner.

“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 method is predicated on the fundamental notion that insurance coverage is inherently a fancy subject and folks want to work together with an individual and obtain personalised recommendation. And solely then do applied sciences come into play with all the standard cell purposes and on-line panels for registration and submitting claims.


Few industries are proof against an financial downturn, and insurtech is no different. Just within the final month Policygenius cuts a quarter of its staff shortly after elevating $125 million, whereas Next Insurance cuts costs by about 17%. In the opposite place, master from public insurance companies are buying and selling nicely beneath their unique IPO worth, together with Root, Hippopotamusin addition to Lemonadethe latter additionally reportedly fired part of his staff back in April.

On the opposite hand, we now have seen slightly big funding in insurance coverage expertise, and Branch not too long ago raised $147 million Series C tranche at a valuation of $1.05 billion, whereas YuLife made $120 million at an $800 million valuation final week alone. Throw within the combine constant flow from less investment into area, and it’s clear that even when 2022 doesn’t observe within the footsteps of the bumper yr 2021, insurtech not quite dead in the water.

From Wefox’s standpoint, it’s solely been a yr because the firm raised $650 million in funding, so it’s laborious to think about that it may burn that a lot cash in such a brief time period. And apparently not – in line with Teike, he wasn’t determined to lift cash once more, he was simply getting ready for the longer term if he wanted 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 mentioned.

Wefox’s Series D spherical, which is compromised by fairness and leverage, was led by funding agency Mubadala, with participation from LGT, Horizons Ventures and Omers Ventures. With money, the corporate mentioned it plans to enter new European markets in 2022, and long term plans to enter the US and Asian markets in 2024.

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