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No-go on Mubadala’s proposal to sell Wefox to Adia-backed Ardonagh: German ins. tech startup Wefox has reportedly turned down Mubadala’s proposal to sell the cash-strapped firm to Abu Dhabi Investment Authority-backed UK ins. broker Ardonagh Group, writes Bloomberg, citing sources familiar with the matter. Following the startup’s rejection of the sale, which gave the startup an enterprise valuation of EUR 550 mn, the board decided to replace CEO Mark Hartigan, who took on the role in March and supported the sovereign wealth fund’s offer.
REFRESHER- Reported earlier this month, the rejected proposal would have seen the startup split into two, with Ardonagh taking over the core of the company and a separate firm comprising Wefox’s tech platform and Swiss business set up and owned by early investors and shareholders.
Background: Founded in 2015, Wefox has secured multiple investment rounds over the years, with Mubadala leading a round in 2022 that valued the startup at USD 4.5 bn. Despite the promising start, the company has faced mounting challenges recently, now grappling with financial pressures due to high operational costs and the need to turn profitable. Hartigan had succeeded Wefox founder Julian Teicke to restructure the financially strained startup.
Mubadala wants the payoff: The Abu Dhabi sovereign wealth fund is opting for an “aggressive” approach towards its currently unprofitable startup investments, which it ramped up when low interest rates sparked an interest in venture capital, according to Bloomberg.
ICYMI- This week, Mubadala agreed to invest USD 250 mn in Turkish delivery company Getir as part of the company’s restructuring plans, which will see the fund hold a controlling stake.
Wefox is looking to secure fresh funding — but Mubadala might sit this one out: The startup’s board approved a EUR 25 mn convertible loan agreement arranged by investors Chrysalis Investments and Target Global, reports Bloomberg. The startup also plans to secure additional funds from another funding round and is in talks to sell its e-bike ins. unit, Assona, in a transaction worth at least EUR 50 mn. Mubadala’s participation in the funding round remains uncertain as the sovereign wealth fund is currently “evaluating its options,” sources in the know told Bloomberg.
