Wefox Secures $55 Million in Fresh Funding

Wefox, a German insurance technology group valued at $4.5 billion, has secured $55 million in fresh funding. The funds were raised from Deutsche Bank and UniCredit in a debt financing deal. The deal is structured as a convertible debt agreement, which means the debt will be converted into equity when Wefox next raises cash.

This funding follows on from previous rounds this year, including a $55 million debt round from JPMorgan and Barclays and a $55 million internal fundraise. This brings the total amount of funding Wefox has raised this year to $160 million. Despite challenging macroeconomic conditions for the insurtech industry, this marks a significant vote of confidence in the company.

A Boost for Global Expansion and M&A

The newly raised funds are set to accelerate Wefox’s global expansion and strengthen its mergers and acquisitions strategy. Unlike its peers, such as Lemonade in the U.S. and Getsafe in Germany, Wefox operates through a network of both in-house and external brokers for the distribution of its insurance products.

The company is also exploring a new model of selling insurance called “affinity” distribution. In this model, Wefox sells its insurance software to other businesses for a subscription fee, an example of which is an online car dealer offering car insurance at the point of sale.

Strong Backing and AI Investment

Wefox enjoys backing from some of the most notable names in venture capital and traditional finance. The company’s backers include Salesforce Ventures, Target Global, Seedcamp, Speedinvest, and Horizon Ventures, with additional support from UBS, Goldman Sachs, Mubadala Capital Ventures, and Jupiter Asset Management.

The company also invests heavily in artificial intelligence (AI), aligning with the recent trend towards technology in the insurance industry. Wefox utilizes AI to automate policy applications and customer service, with three tech hubs in Paris, Barcelona, and Milan dedicated to AI development.