German insurtech startup WeFox’s US$650 million Series C funding round has won the backing of Abu Dhabi sovereign wealth fund Mubadala and Canadian public pension fund OMERS, making it one of the largest Series C venture capital rounds of all time. The funding round values the company at US$3 billion, up from US$1.7 billion in the December 2019 Series B round.

Specializing in personal insurance products, Wefox is one of several fintech companies backed by venture capital from state-owned investors. Mubadala and OMERS are active venture capital investors in fintech and both previously backed WeFox’s Series B round.

Wefox Group’s rapid growth could set the trend. In 2020, the company generated US$140 million in revenue and its insurance carrier reported a profit and by 2023 the whole group is aiming to become profitable. The funding round will help boost its ambition to expand its geographical footprint.

Trends point to 2021 being a year of growth for SOI investment in fintech VC, potentially making it one of the biggest years in terms of deal value. In the year to date, SOIs have invested US$600 million in fintech VC in 14 deals, compared to more than US$800 million in nine deals for the whole of 2020.

The advance of insurtech follows the general path of disruptive innovation in the financial sector, although in terms of total value of investment SOIs have yet to make a big impact. Some jurisdictions are seeing deregulation to enable insurtech companies to introduce their products in specific segments without the regulatory requirements faced by traditional providers.

The development of the sector conforms with the global digitalization trend in which customers increasingly seek to make digital transactions across channels. The disruptive nature of the technology-led business models are bound to entice more VC-friendly SOIs to insurtech.

Related funds Mubadala OTPP