Insurtech Wefox Holding is replacing CEO Mark Hartigan

Wefox Holding will replace Chief Executive Officer Mark Hartigan after the insurtech startup’s board rejected a proposal by its largest stakeholder, Mubadala Investment, that he backed to sell the company.

After the board rejected a proposal from its largest stakeholder, Mubadala, to sell the company to UK insurance broker Ardonagh, Hartigan, who took on the role in March, will be replaced by the end of the year.

The board has approved a €25 mn convertible loan agreement with investors Chrysalis Investments and Target Global and plans to raise additional funds, according to the sources. Wefox is negotiating the sale of e-bike insurer Assona, expecting to raise at least €50 mn from the deal (see about Global InsurTech Funding in 2024).

Insurtech Wefox changes CEO

The setback for Mubadala comes as the $300 bn Abu Dhabi wealth fund becomes more aggressive at unprofitable startups it invested in when low interest rates fueled a boom in venture capital.

Mubadala agreed to take a controlling stake in Turkish food delivery firm Getir and will replace its CEO as part of a deal to raise money for the company.

Last month, Hartigan sent out a memo to shareholders highlighting the potential of insolvency unless Wefox was able to sell several assets.

Insurtech wefox has raised a total of $110m from Series D extension with a $55 mn credit facility from J.P. Morgan and Barclays, the remaining $55 mn in equity was raised from both new and existing investors as a second closing of the Series D funding at a valuation of $4.5bn.

Following his replacement in March, former CEO Julian Teicke expressed his conviction that the move would enable him to continue providing strategic guidance to Wefox while dedicating more time to nurturing emerging ventures in various sectors. Teicke, who founded Wefox nearly nine years ago, transitioned to the role of President on the board.

Julian Teicke - Founder, Board Member & CEO @ wefox Group

Change is a fundamental part of both business and success, and this step is the right step for Wefox and for me personally

former CEO Julian Teicke

He released a statement saying: “It allows me to maximise my impact for Wefox while allowing me to focus more time and energy on my other big passion: supporting founders in building up their own ventures and giving them the audacity to dream big to build industry-leading ventures. I look forward to the next chapter of Wefox and pass the captain’s armband to Mark.”

A report by the Financial Times also stated that the European insurance start-up that was once highly valued and raised the world’s largest funding round for an insurtech a $650 mn, is close to insolvency, and the fund is working to salvage its investment in the Berlin-based company, which has faced significant challenges in recent years.

Wefox, which operates in eight countries and has more than 2 mn customers, is running out of cash as funding requirements for the insurance business strain its finances. Mubadala had proposed selling the struggling company to UK insurance broker Ardonagh Group Ltd.

Insurtech Wefox changes CEO: Mark Hartigan steps down

Mark Hartigan has previously served in various leadership roles, including CEO of LV= and Head of Operations for Europe, the Middle East, and Africa at Zurich Insurance Group.

He also served as CEO for Zurich Global Life in the Asia Pacific and Middle East regions, where he successfully led regional business operations across Europe.

Hartigan replaced co-founder Julian Teicke as CEO in March as Wefox’s financial situation worsened.

The Berlin-based company lost more than €100 mn last year and faces as much as €70 mn in fresh capital needs through the end of 2024.

Wefox’s founders and some of the company’s early backers opposed a sale to Ardonagh, which gave the startup an enterprise value of as much as €550 mn, because it put them at risk of losing their entire investment, Bloomberg reported previously. Wefox was valued at $4.5 bn in a Mubadala-led funding round two years ago.

Peter Sonner   by Peter Sonner