Berlin-based digital insurance company wefox has landed $650 million in financing, giving the a firm a valuation of $3 billion, according to a Tuesday (June 1) press release.
The company said it intends to invest the proceeds in expanding into the U.S. and Asia within the next two years — while building up the business in such existing markets as Germany, Austria, Switzerland, and Poland.
The fully licensed digital insurance company, sometimes called an “insurtech,” does not sell directly to consumers. Instead, it sells through intermediaries.
Target Global led the round, per the announcement, with participation by existing investors G Squared, Omers Ventures, Merian, Horizons Ventures, Eurazeo, Mubadala, Creditease, Salesforce Ventures, Speedinvest, Alma Mundi Ventures, Victory Park Capital, GR Capital, Mountain Partners, Seedcamp, and Sound Ventures. New investors include LGT, Partners Group, Jupiter, and FinTLV.
The company said it made a profit with its insurance business, wefox Insurance, last year, making it the first digital insurance company to reach profitability.
The company was launched in 2015 by founders Fabian Wesemann and Dario Fazlic along with CEO Julian Teicke. The firm has been considered one of Europe’s most promising unicorns — a privately held startup worth more than $1 billion.
In addition, wefox increased its revenue to $143 million in 2020, doubling its 2019 revenue.
“Our business has grown significantly over the past six years, and since the beginning we have consistently delivered strong year-on-year growth,” said Teicke. He added that, this year, the company “took several important steps, including unifying the business under one brand, expanding into Poland, and setting up a deep tech team in Paris.”
He said wefox uses technology “to increase customer satisfaction, reduce customer acquisition costs, increase cross-selling, and decrease churn.”
As “the first insurtech to reach profitability,” wefox delivers “exceptional results backed with demonstrable year-on-year revenue growth,” Yaron Valler, general partner at Target Global, said in the news release.
A new PYMNTS study, done in collaboration with Franklin Madison, concluded that financial institutions (FIs) are missing out on potential life insurance sales. That’s especially in regards to younger consumers.
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