Wefox, which sells insurance plans via an online platform, raised the fresh cash in a debt financing deal from the two European lenders. The deal was structured as a convertible debt agreement, meaning that the debt will be converted into equity when Wefox next raises cash, as per CNBC.com.
The fresh funding follows on from a USD 55 million debt round Wefox raised from JPMorgan and Barclays and a USD 55 million internal fundraise earlier in 2023.
As Wefox didn’t raise equity, its valuation remains unchanged at USD 4.5 billion.
This debt financing round boosts Wefox's 2023 funding to USD 160 million, showcasing confidence amid challenges in the insurtech industry. The funds will drive Wefox's global expansion efforts and support strategic mergers and acquisitions.
Unlike other insurtech platforms like Lemonade in the US or Getsafe in Germany, which offer insurance directly to consumers without involving brokers, Wefox works with a network of brokers, both in-house and externally, who distribute its insurance products.
Wefox is also pushing into a new model of selling insurance called ‘affinity’ distribution. This is where the company sells its insurance software to other businesses for a subscription fee — for example, an online car dealer adding car insurance at the point of sale.
The insurtech startup’s VC backers include Salesforce Ventures, Target Global, Seedcamp, Speedinvest, and Horizon Ventures, while UBS, Goldman Sachs, Mubadala Capital Ventures, and Jupiter Asset Management are also existing investors.
The company is also investing heavily in artificial intelligence, which has become a hot area of tech recently following the rise of viral AI chatbot ChatGPT. Wefox mainly uses AI to automate policy applications and customer service. The company has three tech hubs in Paris, Barcelona, and Milan dedicated to AI.
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