JPMorgan and Barclays back $4.5 billion insurance tech giant Wefox
Wefox, a German digital insurer, announced Wednesday it secured $110 million in new funding from JPMorgan and Barclays. Despite macroeconomic headwinds, the news represents a vote of confidence for the insurance technology sector. Wefox is a Berlin, Germany-based firm offering home, motor, and personal liability insurance. Rather than underwriting claims, the company connects its users with brokers and partner insurance firms through an online platform. Founded in 2015, it competes with the likes of U.S. digital insurer Lemonade and German firm GetSafe, as well as established insurance incumbents like Allianz.
Wefox raised the funds through a combination of equity and debt financing. Of the $110 million total, $55 million is financed by credit facilities provided by the banks of JPMorgan and Barclays. Squarepoint Capital led a further $55 million equity investment, a global investment management firm with $75.7 billion in assets under management. “It’s a new type of financing for a growth company,” Julian Teicke, Wefox’s CEO and co-founder, told CNBC in an interview. “Risk investors, equity investors, they understand, they want to take risk.” “Banks typically don’t, so for them it was really important to understand our path towards profitability and the maturity of our business,” he added. The company said it maintained its $4.5 billion valuation from a July funding round — somewhat rare in today’s market, with many fintechs seeing their valuations slump drastically. Wefox’s announcement comes as fintech and the technology industry as a whole grapple with a harsher economic environment, finding it more difficult to raise funding.