Wefox, the Germany-based digital insurance company, has raised $650 million for its series C funding round led by Target Global, resulting in a post-money valuation of $3 billion.
The insurtech intends to invest the proceeds in strengthening its presence in existing markets and expanding globally within the next two years.
Wefox, which was launched in 2015, has grown its revenues to more than $140 million in the 2020 financial year and reported a profit for 2020 through its insurance carrier, wefox Insurance.
Julian Teicke, chief executive officer and founder of wefox, says: “We’ve grown our business significantly over the last six years since we launched and we have delivered strong year-on-year growth. This year we took several important steps, such as unifying the business under one wefox brand, expanding into Poland, and setting up a deep tech team in Paris.”
“Within the next few years, we will expand our global footprint, increase our presence in Europe, and move into both the US and Asian markets. wefox will become the leading personal insurance company within the decade.”
“We have set out to improve the customer experience for both our advisors and our customers through technology to increase customer satisfaction, reduce customer acquisition costs, increase cross-selling, and decrease churn.”
Teicke adds: “This is why wefox has built a huge network of advisors across Europe. We believe that insurance is all about people, and we believe that technology is an enabler and should not replace the human connection.”
Wefox is a fully licensed digital insurance company that sells insurance through intermediaries and not directly to customers, which has resulted in significant growth with a clear path to profitability.
The insurtech continues to deliver a loss ratio supported in large part by its straight-through-processing (STP) of more than 80%, and a central product factory that swiftly distributes new products to the market due to its full stack insurance technology.
Fabian Wesemann, chief financial officer and founder of wefox, says: “This investment strengthens our growth strategy and moves us closer to realising our vision—to prevent 30% of risks from happening—in order to offer the most advanced service to our customers. As part of this, we want to ensure that we are building the technology to automate our business processes to have a STP ratio consistently above 80%.”
Wesemann adds: “This investment round is the culmination of six years of hard work and we are still at the very early stage of our business. I want to thank the entire wefox team for their hard work in enabling us to achieve such incredible results.”
Yaron Valler, general partner at Target Global, comments: “Wefox continues to deliver exceptional results backed with demonstrable year-on-year revenue growth, which saw their insurance carrier, wefox Insurance, report a profit earlier this year, marking them out to be the first insurtech to reach profitability. We invested in wefox in their series A round in 2016 and we are delighted to be leading this series C round. Wefox is unique among the insurtech players with ample room for growth ahead.”
Goldman Sachs International served as the private placement agent to wefox for the financing round.
Wefox makes every employee a shareholder following series C round
Having secured a series C round of $650 million that values the business at $3 billion, the founders of wefox, Teicke and Wesemann, presented every member of staff with share options worth €5,000.
Teicke says: “We couldn’t have achieved our success without the talent, knowledge, commitment and sheer hard work given by our colleagues around the world. Our record series C funding round is our success, collectively. Everyone has played a part in securing it. Now everyone is a shareholder in this incredible business.”
Wesemann continues: “The question isn’t why have we made everyone a shareholder. The question is why wouldn’t we make everyone a shareholder? We have, since our inception, looked at ways in which we can reward all of our teams with shares. But it’s not easy to make it work favourably for employees because share options are usually taxed in the same way as salary is taxed. They should be treated as capital gains which would be way more beneficial to employees. Governments in Europe must work fast to improve this crazy situation. In so doing, they will without doubt support innovation across the region.”
Teicke adds: “We weren’t prepared to wait for governments to catch up. So as well as making everyone a shareholder, we also set up a buyback scheme too. It gives our colleagues the choice to keep or sell their options back to the business. We want everyone at wefox to share in our success as we work to become the leading personal insurance company within the decade.”