Deutsche Bank, Groupon Alumni’s Startup Valued at $3 Billion
(Bloomberg) -- Wefox, an insurance-technology firm founded by former Groupon Inc. and Deutsche Bank AG staff, raised $650 million in a funding round that values the company at $3 billion.
Venture capital firm Target Global led the investment in Berlin-based Wefox, which sells property-insurance products in Germany, Poland and Switzerland and also offers related software.
Wefox plans to use the money to expand to new countries, including Italy, and later this year add life- and health-insurance products to its portfolio, Chief Executive Officer Julian Teicke said in an interview.
A former Groupon sales manager, Teicke founded Wefox in 2014 with entrepreneurs including Chief Financial Officer Fabian Wesemann, who previously worked as an analyst at Deutsche Bank.
Insurtech firms aim to upend the insurance industry through the integration of technology, just as fintech companies have done in banking. Berlin is home to some of Europe’s most successful financial-technology firms. Broker app Trade Republic, founded by a former Merrill Lynch banker, last month raised $900 million at a valuation of more than $5 billion.
While Wefox handles on-boarding, administration and claims reports for its insurance products largely digitally, it uses brokers and advisers for sales.
“Claims rates are lower this way, and the loyalty of customers is greater,” Teicke said.
The CEO said he seeks to double the company’s overall revenue to about $350 million this year and targets profitability in 2022.
Munich Re backs Wefox’s insurance products with reinsurance coverage and also provides know-how and infrastructure. When Wefox recently launched in Poland, Munich Re helped with information on the local insurance market.
Goldman Sachs Group Inc., which is an investor in Wefox, advised the startup on the latest funding round. Participants also included Salesforce Ventures, Partners Group, Omers Ventures and others. The round was oversubscribed several times, according to Wefox.
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