Wefox, a European insurance company, is reportedly finalising a €170m (£141m) financing package led by private equity firm Searchlight Capital Partners, according to Sky News.
Searchlight Capital, which has previously supported companies such as travel business Secret Escapes, is spearheading this initiative to refinance Wefox’s existing bank debt.
This package includes an equity raise of between €80m (£66.5m) and €100m (£83.1m), involving a consortium of investors led by Chrysalis, a London-listed backer of Klarna and Starling Bank, and Target Global.
Founded in 2015, Wefox sells insurance products through a hybrid model utilising both in-house and external brokers.
The company has a strong presence across European markets and serves more than 2 million customers. It aims to revolutionise the insurance industry by leveraging cutting-edge technology.
The fresh funding will help the firm avert a fire-sale of key assets, including its prized subsidiary TAF. This comes after the company earlier sold its insurance carrier arm to a group of Swiss companies led by BERAG, a pension services provider.
Wefox has faced significant financial challenges, reporting losses in major markets such as Italy while maintaining profitability in the Netherlands.
Earlier this year, it secured €20m (£16.6m) from existing investors to address immediate funding needs and sold another subsidiary, Assona, specialising in insurance for electric bikes.
In 2022, Wefox raised $400m (£318m) in a Series D round, valuing it at $4.5bn (£3.6bn). That followed a $650m (£516m) round in 2021, valuing the company at $3bn (£2.4bn). However, its current valuation has fallen below $1bn (£796m), losing its unicorn status.
Prominent investors in Wefox include Abu Dhabi’s state fund Mubadala, and lenders such as Barclays and JP Morgan. The refinancing package is expected to be finalised next month, allowing Wefox to stabilise its operations and avoid further asset sales.
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