German insurtech Wefox has raised $400m in a Series D round of funding to help with product development and expansion across Europe.
The round comprised both equity and debt funding. Mubadala Investment Company led the equity raise, with participation from Eurazeo, LGT, Horizons Ventures, OMERS Ventures and Target Global.
The latest funding round values Wefox at $4.5bn, which is an increase from its $3bn valuation after raising $650m last year.
Wefox, which was founded in 2015, sells insurance, such as house and motor insurance, through intermediaries on its platform. Earlier this month, the company reached 2m customers and said it was one of the first insurtechs to hit this milestone.
The Berlin-based start-up plans to use the funding for product development and European expansion, with a goal to move into Asia and the US after.
Co-founder and CFO Fabian Wesemann said the company is in “the strongest position ever” and that its indirect model allows it to be cash efficient.
He added that the fresh financing is a “strong validation” from the investment community and a testament to “continuous performance even in turbulent times”.
“Our model ensures we deliver a stronger financial profile with a clear path to profitability,” Wesemann said. “This is vital at all times but especially in the current economic climate which demands greater financial discipline.”
Wefox said it is still recruiting despite the current economic climate, going from 550 employees last year to more than 1,300 staff currently. The company expects to reach a headcount of 2,000 by the end of the year.
“We continue doubling our revenues with last year reaching $320m,” said Wefox co-founder and CEO Julian Teicke. “Within the first four months of this year Wefox generated more than $200m in revenues, which keeps us on track to achieve our revenue target of $600m by the end of 2022.”
The company recently appointed former Klarna executive Hanna Jacobsson to its board of directors. Klarna, the Swedish fintech giant, saw a major cut in its valuation this week following the closure of its $800m funding round.
The ‘buy now, pay later’ start-up reached a valuation of almost $46bn last year, but is now valued at just under $7bn. In May, Klarna also said it was cutting 10pc of its workforce around the world following what its CEO described as a “tumultuous year”.
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