European insurtech startup Wefox grabs $650 million at a $3 billion valuation, German startup Wefox has raised a $650 million Series C funding round led by Target Global. Following this funding round, the corporate has reached a post-money valuation of $3 billion. Wefox may be a digital insurer focused on personal insurance products, like household insurance, motor insurance, and private insurance.
“It’s far more than we wanted to boost initially. it had been a really fast process and essentially we were oversubscribed by 4x approximately,” co-founder and CEO Julian Thicke (pictured right) told me.
In December 2019, the corporate reported a $1.65 billion valuation. and therefore the company says today’s funding round is one among the most important Series C rounds of all time — and certainly the most important Series C round for an insurtech company more specifically.
“Almost all of the large existing investors are participating,” Teicke said. OMERS Ventures, G Squared, Mountain Partners, Merian, Horizons Ventures, Eurazeo, Mubadala Capital, Salesforce Ventures, Speedinvest, CE Innovation Capital, GR Capital, and Seedcamp are all participating once more during this Wefox founding round. New investors include FinTLV, Ace & Co, LGT, and its affiliated impact investing platform Light rock, Partners Group, EDBI, Jupiter, and Decisive.
“Not only have we raised an excellent great deal but also during a in no time time. It took us a complete of 4 weeks to urge all commitments in,” co-founder and CFO Fabian Wesemann (pictured left) told me.
Wefox believes it can now iterate and generate more and more revenue because it scales — it just needs capital to succeed in subsequent level. “We’re tackling that $5.2 trillion industry that has been stuck within the pre-internet era. We nailed the way to disrupt it in our core market,” Teicke said.
But what makes Wefox different from legacy insurance companies? Wefox isn’t a direct-to-consumer insurance firm . Most insurance products are still sold by agents and therefore the startup believes this isn’t getting to change anytime soon.
That’s why Wefox has 700 agents selling Wefox products exclusively. It also partners with associate brokers — around 5,000 can distribute Wefox products.
“While the remainder of the industry seems to mention that human agents are dead, we expect they’re more relevant than ever,” Teicke said.
In 2020 alone, the corporate generated $140 million in revenue. If you check out Wefox Insurance, the company’s insurance carrier, the corporate reported a profit for 2020. As for the group, “we’re getting to show overall profitability by 2023,” Wesemann said.
That fast rate of growth combined with a transparent path to profitability means Wefox has an ambitious roadmap. As a full-stack insurance firm licensed in Lichtenstein, Wefox can passport its license to other European countries. the corporate is currently sleep in five markets immediately and is functioning on expanding to Italy soon.
In addition to new markets, Wefox plans to sell new insurance products — property and casualty insurance, pet insurance, insurance , life insurance… If you’re brooding about an insurance product, likelihood is that Wefox is already performing on it. “This year we’re launching around 20 new insurance products,” Teicke said.
While distribution is managed decentrally with local agents talking with local customers, insurance products are managed centrally. The startup prioritizes products by revenue potential and goes down the list one product at a time.
Finally, Wefox has ambitious plans when it involves reducing administrative costs. the corporate has been investing in automation in order that common processes are handled by an algorithm. Currently, 80% of its processes are handled automatically. It’s a never-ending process as you’ve got to adapt your processes once you launch new products.
Wefox is additionally performing on prevention. the corporate has put together an AI team in Paris to stop bad things from happening within the first place. As always with insurance companies, it’s all about optimizing every layer and each step of the customer journey to create a product that stands out from what’s already out there.
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