Wefox, an online provider of insurance plans, has secured $55 million in debt financing from Deutsche Bank and Unicredit.This financial injection did not include an equity injection, meaning the company's value remains steady at $4.5 billion.The addition of this latest funding brings the total funds Wefox has raised in 2020 up to $160 million.
Wefox, the $4.5 billion German insurance technology firm, has raised $55 million in a debt funding round from Deutsche Bank and UniCredit, two sources familiar with the deal informed CNBC. The debt agreement is structured as a convertible, which implies that the debt will convert to equity when Wefox raises funds in the future. This brings the money Wefox has obtained this year to a total of $160 million. This marks a sign of trust in the current capricious macroeconomic climate of the insurtech sector. The funding will be utilized to back their global expansion attempts and put more emphasis on M&A activities. Unlike other insurtech companies such as Lemonade or Getsafe, which offer insurance without brokers, Wefox works with a network of both internal and external brokers to distribute their insurance products. Additionally, Wefox is currently pursuing “affinity” distribution, by selling insurance software to other companies for a subscription fee. It is supported by VCs such as Salesforce Ventures, Target Global, Seedcamp, Speedinvest, and Horizon Ventures, as well as big-name players in the conventional financial world such as UBS, Goldman Sachs, Mubadala Capital Ventures, and Jupiter Asset Management. Wefox’s main focus is on using AI for automating policy applications and customer service, which has increased in appeal recently due to the success of ChatGPT. There are three tech hubs in Paris, Barcelona, and Milan devoted to AI. The company’s valuation remains at $4.5 billion, as no equity was raised.
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