Wefox officials sent a memo to shareholders in early May 2024, stating that the business could become insolvent in August 2024 or earlier. The memo stated that the opportunity to rebuild through restructuring and any optionality for the future remains dependent upon reaching a sustainable position by balancing cashflows with the timing of their planned disposals.
The growing demands on Group cash—due to the need for solvency across countries, regulatory requirements for upfront carrier capital, business disruptions from increased media leading to partner uncertainty, and the control of cash and rising costs related to the Revolving Credit Facility—make the Wefox leadership concerned that this balance will be disrupted.
This news comes amongst job cuts amongst the Wefox ranks and shutdowns of their offices in Italy, Germany, Poland, and Switzerland.
The company was valued at GBP 3.6 billion less than in 2022, with lenders including Barclays and JP Morgan, but has since been descending into crisis. Wefox was founded in 2015 and has since amassed 3 million customers globally.
In 2023, Wefox secured USD 55 million in debt financing from UniCredit and Deutsche Bank, adding to previous funding rounds. The company, valued at the time at USD 4.5 billion, planned to utilise the funds for global expansion, strategic mergers, and acquisitions.
Wefox stands out with its broker-focused model and explores 'affinity' distribution, offering insurance software to businesses. Supported by a diverse group of investors, including Salesforce Ventures and UBS, the company aimed to fuel growth and innovate within the insurtech industry.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now