It’s not easy for young financial companies at the moment. Swedish payment service provider Klarna received $800 million in capital from investors on Monday, but had to give them so many shares in return that the company’s total value is just $6.7 billion. In June 2021, investors valued the start-up at $45.6 billion – Klarna lost 85 percent of its value in one year.
The insurance start-up Wefox in Berlin defies the trend. Investors led by Mubadala Invest, the sovereign wealth fund of the Emirate of Abu Dhabi, have invested another 400 million euros in Wefox, bringing the total to $1.3 billion. Wefox was valued at $4.5 billion, significantly more than the $3 billion from 2021.
Most young companies aim to go public after three large rounds of financing. “But that doesn’t currently make sense in view of the stock market environment,” said Wefox co-founder and boss Julian Teicke of the SZ. His company focuses on delivering what is promised. “We get money even without an IPO,” he said confidently. The company currently had no need, “we were well financed”. But there are many growth opportunities. Wefox is now well prepared, “no matter what storm comes”.
The company wants to use the new money to invest in other countries
The Wefox Group includes a small insurer in Liechtenstein and brokerage firms in Germany, Switzerland and Italy. Total turnover last year was 310 million euros, and Teicke wants to almost double it in 2022. 800 representatives and other exclusive intermediaries work for Wefox, plus 5000 brokers. The company speaks of two million customers. In 2021, the company had 550 employees, and by the end of this year it is expected to have a total of 2,000.
Teicke wants to use the new money to expand into other countries. “Holland are next,” he said. However, he wants to put most of the money into the further development of his own digital insurance platform. “Over time, the platform will also be usable for other insurers.”
The company, which was founded in 2015, is currently expanding the partnership business with car dealerships and electronics dealers, who also offer insurance with the sale. “We are also talking to car manufacturers,” said Teicke. He didn’t want to name names. Sooner or later, Teicke will have to tackle the issue of going public again – after all, investors want to see their money again after a few years.