The German firm has announced that it has raised fresh funding from huge financial backers.
Wefox, an insurtech company from Germany, has announced that it recently raised $110 million in new funding from big-name backers that included Barclays and JPMorgan.
This reveals a notable confidence boost in the rapidly growing insurance technology sector.
The insurtech company is based in Berlin and has a primary focus on personal insurance products such as auto, home, and personal liability policies. Instead of underwriting claims, the firm links users with brokers and partner insurers by way of its online platform.
Among the main rivals to Wefox are US digital insurance firms such as Lemonade, or GetSafe, from Germany. That said, since 2015 when it was first established, the company has also found a place in competition with Allianz.
According to the announcement from the firm, the new funds were raised by way of fresh equity and debt financing. They brought in $110 total in this round, of which $55 million was in the form of a credit facility from Barclays, JPMorgan and other major banking firms. Another $55 million was an equity investment headed by Squarepoint Capital.
Insurtech company trends are beginning to rise quickly as traditional insurers remain slow to evolve.
“It’s a new type of financing for a growth company,” explained CEO and co-founder of Wefox, Julian Teicke, in an interview with CNBC. “Risk investors, equity investors, they understand, they want to take risk.”
“Banks typically don’t, so for them it was really important to understand our path towards profitability and the maturity of our business,” added Teicke.
Following a funding round last July, the company said that it had held onto a $4.5 billion valuation, which is an achievement in the current market, where some fintechs rise, but many others watch their valuations plummet.
The announcement from the insurtech company arrived as both the fintech and technology industries face a challenging economic ecosystem, making it more difficult to raise fresh funds. Investors have been grappling with higher interest rates and fintech in particular has been struggling in this challenging economic and investment environment.