European insurance technology startup Wefox raised $400 million in a Series D funding round, giving the German company an after-money valuation of $4.5 billion. This represents a 50% increase on a valuation of $3 billion last year at its C chain ring.
Founded in Berlin in 2015, Wefox sells various insurance products through a combination of internal and external brokers, bypassing the direct-to-consumer model of its competitors. Insurance technology paintings include rival of German startup Getsafe. This way of increasing users, by requiring third-party brokers to use Wefox to advise their own clients, is how CEO and founder Julian Teicke calculates has doubled the company. revenue to $320 million last year. Furthermore, it generated $200 million in the first four months of 2022, set a target of $600 million in revenue by year-end, and recently surpassed 2 million customers on a large scale.
So far, Wefox says it has built a network of around 3,000 independent brokers in Germany, while in other markets such as Switzerland, Germany and Austria it has trained its own brokers. me.
“Wefox’s secret sauce lies in its indirect distribution business model, which has allowed the company to scale faster than any other high-tech company in the world,” Teicke told TechCrunch. “Our model is unique in the high-tech space, as all other models are directed at consumers.”
The customer buys the product again
The main benefit of this model lies in the cost of winning customers, which will be significantly lower since its brokers, agents and other partners do most of the work for Wefox. Furthermore, this also allows Wefox to penetrate new markets more quickly.
“We can then focus on allowing our brokers, dealers and hobbyists to target the most profitable clients, which improves loss rates and long-term customer value,” added Teicke. “Our model allows Wefox to drive a superior financial profile, giving us a clear path to profitability.”
This approach builds on the fundamental notion that insurance is an inherently complex subject and people want to talk to a human and get personalized advice. And only then will technology come into play, with all the usual mobile apps and online dashboards to register and file a claim.
Wefox
Depression
Some industries are not affected by the economic downturn, and insurtech is no different. Just last month, Policygenius to cut a quarter of the workforce right after raising $125 million, while Subsequent coverage is shrinking back to around 17%. In other places, a server of the publicly traded insurtech companies are trading off their initial IPO price, which includes Source, Hippopotamusand LemonadeThe latter is also said to have given birth to a part of its staff returned in April.
On the other hand, we have seen some bumper investments in the insurtech space, with the Branch recently attracting C-series worth $147 million at a valuation of $1.05 billion, while YuLife earns 120 million USD at an $800 million valuation just last week. Throw in the mix steady flow of the Smaller investment into space, and it’s clear that even if 2022 doesn’t follow in the footsteps of a bumper 2021, insurtech not exactly dead in the water.
In Wefox’s view, it’s only been a year since it raised a $650 million funding round, so it’s hard to imagine that it could burn that much cash in such a short amount of time. so. And, it seems, it’s not – according to Teicke, it’s not desperate to raise money back, it’s simply future-proof if it needs money.
“We didn’t need more cash, however after our Series C round, investors approached us and in light of the current economic climate we believe it is prudent to look at the situation and take advantage of the current economic downturn – because we take this as a Teicke said.
Wefox’s Series D round, which includes equity and debt, is led by Mubadala Investment Company, with participation from LGT, Horizons Ventures and Omers Ventures. Cash-strapped, the company says it plans to enter new European markets by 2022, with a longer-term plan to expand into the US and Asia by 2024.
