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Germany-based insurtech Wefox has raised a $125 million Series B funding round led by Abu Dhabi government-owned Mubadala Ventures, which included participation from China-based Creditease, according to TechCrunch.
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This marks the first investment from Mubadala’s new European Investment Fund and brings Wefox’s total funding to date to $158.5 million. The funding will be used for expansion in Europe and to grow its product and engineering teams.
There are two key reasons why Wefox may be spurring investor interest:
- Wefox has two business arms — Wefox for brokers and its One service for consumers — which ensures that its products are suitable for a large market.Wefox works with over 1,500 brokers and allows them to onboard their customers onto Wefox’s platform to manage their policies. This ensures that the insurtech provides a suitable service for consumers who prefer a human touch when buying insurance. Additionally, with its fully digital customer-facing arm One, the firm also provides tech-savvy consumers with an option that caters to their preferences, and already has onboarded over 400,000 users.
- Wefox partnered with SBI Group earlier this year to launch in Asia, which may have piqued the interest of Asian investors. The two parties formed SBI Wefox Asia, which is based in Tokyo and uses Wefox’s AI and big data solutions to construct new insurance and distribution models. While this latest funding will be used to expand in Europe, we may see Wefox grow its business in Asia in the future, and with the help and support of its new investors.
This latest funding round further strengthens Germany’s position as a new fintech center in Europe. Throughout 2018, German fintechs secured €1.13 billion ($1.29 billion) in funding, up 55% from €727 million in 2017. And since the end of last year, Germany’s fintech scene has continued to heat up: Neobank N26 raised $300 million and gained unicorn status in January, and savings and investment marketplace Raisin secured a $114 million funding round in February; these two rounds combined with Wefox’s latest funding round already amount to almost half of the total funding in Germany in 2018.
Further, the diversity of German fintechs that attract funding also suggests that the ecosystem is growing all around, rather than Germany becoming a hub for one fintech segment. Additionally, the fact that Mubadala’s first investment with its new Europe-focused fund was made in Germany suggests that the country has become a promising alternative to the UK.
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Source: Business Insider – feedback@businessinsider.com (Lea Nonninger)