Spiros Margaris: Venture Capitalist, Margaris Ventures / Senior Advisor to wefox Group
The article was was published on Medium on March 5, 2019
Starting with such a strong unicorn statement will force many readers to ask the obvious question: “Why?”
In short, my title derives from my prediction based on the great news that Berlin-based InsurTech wefox Group has closed a record USD $125 million Series B funding round, and knowing that there is more great news to come in the future. Since its inception, wefox Group has grown its revenues to around $40 million, while serving more than 1500 brokers and over 400,000 customers, making it Europe’s number one InsurTech platform.
In the spirit of full disclosure, I am a senior advisor to the wefox Group (wefox & One Insurance) and hence, I am likely a little biased when it comes to my views as to where we are heading with the wefox Group or any other organization I am involved with. While my bias might be natural due to the partnership relationship, it is mostly due to the business case, the team behind the company, and the company vision that are the key deciding factors for my conclusion. Of course, the conviction of Julian Teicke, the founder and CEO of wefox Group, of trying to make a mark in the insurance industry landscape and changing the status quo for the better, helped to convince me that I very much needed to be part this journey.
Our customer can choose whether to (1) avoid the risk, (2) have the perfectly customised coverage in case something happens or (3) carry the risk. This is why the purpose of wefox Group is “To enable people to be safe” rather than “feel safe”. — Julian Teicke, founder and CEO of wefox Group
Again, coming back to my unicorn prediction — it is not based on wishful or biased thinking, but rather, from the obvious: the exceptional growth strategy executed by a fantastic and motivated team in such a short time. Not to mention its further concrete growth plans for the future.
I know it is important to substantiate the story of my unicorn prediction, so I will try to add some pieces to the puzzle to give you a better picture.
Having a successful large Series B funding round led by the investment fund Mubadala Ventures, a newly created European investment fund in partnership with SoftBank Vision Fund (the global VC mega fund) is an excellent start (or a good big piece of the puzzle, so to speak), and the reason why we are on the right track to fulfill my prediction. With this investment, wefox Group has raised the largest Series B round ever by an InsurTech. We are now one of the fastest growing fintech companies from Europe, and a force to be reckoned with on a global scale.
Ibrahim Ajami, head of Mubadala Ventures, said: “We are excited to launch our European platform with our first investment. wefox Group is tackling an industry problem with an innovative and elegant solution by enabling and empowering key stakeholders in the value chain. We are looking forward to partner with wefox Group’s exceptional team of founders, management team and employees.”
The current trend that venture capitalist funding will flow into fewer and larger successful startups will only further strengthen wefox’s position in the future.
Among the new investors in wefox Group is Creditease, signalling wefox Group’s intention to expand into China. Goldman-Sachs International is advising wefox Group on the investment. In previous rounds, wefox Group has attracted some of the world’s leading investors including Target Global, Idinvest, Horizons Ventures, Speedinvest, Seedcamp and Sound Ventures, the VC of Hollywood actor Ashton Kutcher.
I would also like to point out some of the key business pillars of the wefox Group’s future growth strategy that make the valuation case, in my eyes, more complete.
For instance, their value proposition to their insurance brokers has been a compelling partnership by allowing each to focus on its true strengths and to grow fast. Wefox’s insurance management capabilities enable consumers to consolidate all of their policies in one place and gain new insights, therefore allowing brokers to focus more time on advising more clients and to better serve their existing customers.
Furthermore, wefox Group is positioning itself to become the number one distributor for high-quality insurance solutions in their markets. Their cutting-edge technology development and implementation of AI and machine learning allows for a higher level of automation and leads to increased profitability for all parties involved.
Another highlight and strength in the wefox Group portfolio is the ONE“Insurance Built Around Your Life” (one of wefox Group’s core products), which is fast growing with 70,000 customers in the first year and a customer acquisition costs below EUR 10 and further demonstrates the innovative power within the wefox Group organization. ONE’s “GEOTriggering” solution allows for a short-term insurance module around our customers’ lives, which is crucial in addressing the changing consumer needs. ONE also excels at keeping its customer acquisition costs significantly below wefox Group’s in-house expectations and those of their industry counterparts. It is without a doubt the best major B2C InsurTechs in their markets.
Looking ahead, the wefox Group is expanding globally via SBI-wefox, a partnership with SoftBank Investment (SBI), with a target launch in Japan. The wefox Group has also recently signed a strategic partnership with Marsh, probably the world’s largest insurance and risk adviser, to expand the offering beyond personal lines insurance and deliver expanded services to micro small and medium-sized (SME) businesses across Continental Europe.
In short, I believe all the necessary elements are in place for the team to succeed, and to realize the vision of being the first fully integrated insurance market connecting brokers and customers, through a platform that will be bespoke and flexible to the customers’ needs. Its strength comes from successfully mixing the B2B and B2C insurance businesses in such a way that makes it a unique win-win value proposition between its stakeholders. If I had to bet on a few InsurTech companies, wefox Group is one of the winners I would (and did) pick.
You can quote me on this: wefox Group is an InsurTech unicorn in the making.