Insurtech wefox Investors Reportedly Propose €25M Capital Injection to Block Potential Ardonagh Deal

wefox investors have reportedly proposed €25 million capital injection to potentially stop the Ardonagh deal.

London-listed Chrysalis Investments is said to be among the shareholders expected to provide €25 million into what was once one of Europe’s largest Insurtech firms, Sky News reported.

Two of the key investors in Wefox, the struggling insurance tech firm, are now proposing to lead a €25 million capital injection to block a competing proposal from insurance firm Ardonagh to acquire a large share of the firm.

Sky News reported that London-listed Chrysalis Investments and Target Global had turned in a term sheet to Wefox recently that they claim could preserve value for its wider shareholder base.

The suggested €25 million investment, which may also include funding from various Wefox shareholders, may serve as a bridge until the group can sell Assona, a subsidiary that offers insurance for electric bikes. This, according to sources familiar with the matter.

The latest proposal has been revealed amid a fierce battle for the future of what had at one time been one of Europe’s most promising insurtechs.

Wefox has been struggling due to losses in a number of its major markets such as Italy.

However, its business in the Netherlands is still said to be profitable.

The new proposal led by Chrysalis and Target is meant to help the firm move towards profitability, which they think is possible in the coming year.

Mubadala, the Abu Dhabi State fund, reportedly wants to sell a major part of Wefox to Ardonagh as part of a €550 million transaction that may help maintain its returns. However, it may wipe out other shareholders as well as the firm’s founders in the process.

As reported this past month, Mark Hartigan, the UK boss of Wefox, had cautioned investors that it may face a potential collapse within a few months due to regulatory and financial issues.

Wefox had been valued at $4.5 billion as part of an investment round less than a couple years back and notably claims Barclays and JP Morgan as its lenders.

Its evaluation of funding options made it a prominent player in Europe’s tech sector but it is dealing with an existential crisis as of late.

Established back in 2015, Wefox offers various insurance products via in-house and external insurance brokers.

It claims over 2 million clients across its range of business operations.

Hartigan assumed the new executive role from Julian Teicke, one of the firm’s co-founders, who stated earlier this year that his transition to becoming president may allow him to dedicate “more time and energy to his big passion: supporting founders in building up their own ventures.”

The newly appointed exec is also cutting staff in key areas, having slashed 60 roles recently with additional layoffs expected..

In July of 2022, wefox secured a $400 million Series D round which valued it at $4.5 billion.

That massive round followed a $650 million round in May 2021 that valued it at $3 billion.

wefox then acquired an additional $55 million in equity financing as well as the same amount in debt funding from Barclays and JP Morgan a year back.

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