Wefox, a German digital insurer, said on Wednesday that it has successfully obtained $110 million in new capital with the help of illustrious organizations like JPMorgan and Barclays. The insurance technology (insurtech) industry, which now confronts adverse macroeconomic circumstances, is considered as benefiting from this investment infusion.

Wefox is a German company with its headquarters in Berlin that specializes in personal insurance products including auto, house, and liability insurance. Instead of managing claims internally, the business uses its internet platform to link consumers with brokers and affiliated insurance companies. It competes with traditional insurance giants like Allianz as well as digital insurers like Lemonade in the United States and GetSafe in Germany.

A mix of new stock and debt finance was used to obtain the cash. The two largest banks in the world, JPMorgan and Barclays, contributed $55 million of the total raised in the form of a credit facility. Squarepoint Capital, a worldwide investment management company with $75.7 billion in assets under management, funded the remaining $55 million as equity.

Wefox’s CEO and co-founder Julian Teicke called this investment a novel approach of finance a growing business. He underlined that banks are often more cautious than stock investors, who are generally at ease with taking risks. However, JPMorgan and Barclays’ backing shows that they recognize Wefox’s progress toward profitability and the sophistication of its industry.

Wefox retained its $4.5 billion value from a financing round in July, which is an impressive accomplishment in light of the current market climate when many fintech businesses have seen their valuations decline significantly.

Wefox, the Berlin-based insurtech, raises $110M Series B extension | TechCrunchThe news comes at a tough moment for the larger fintech and technology sector as they deal with a more severe economic environment and have trouble obtaining money. Equity markets have fallen as a result of investors reevaluating growth-oriented tech companies in response to rising interest rates. Notably, shares of Lemonade, a U.S. company in the insurtech industry, have fallen 23% over the last year.

The financial industry has been impacted by layoffs, but Wefox has been able to avoid such actions. The business has altered its priorities and given priority to methods that produce favorable outcomes while ceasing activities that are judged ineffective. Wefox, for instance, is focusing on its broker partnership model and its “affinity” way of distribution, where it provides insurance software to companies for a subscription fee, such as online auto dealerships integrating vehicle insurance sales at the time of purchase.

The newly generated money will be used to make further investments in the technology platform and affinity program at Wefox. In order to improve its operations, the corporation is also making significant investments in artificial intelligence (AI). AI is mostly used to automate customer service and policy applications. Wefox has developed three AI development-focused innovation clusters in Paris, Barcelona, and Milan.

Teicke thinks that Wefox is robust in times of crisis despite the difficulties the larger IT sector is facing. The firm saw sales almost quadruple in the first quarter of 2023 compared to the prior year, and it intends to turn a profit by the year’s end.


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