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German startup Wefox has raised a $650 million Series C funding round led by Target Global. Following this funding round, the company has reached a post-money valuation of $3 billion. Wefox is a digital insurer focused on personal insurance products, such as household insurance, motor insurance and personal liability insurance.

“It’s much more than we wanted to raise initially. It was a very fast process and essentially we were oversubscribed by 4x or so,” co-founder and CEO Julian Teicke (pictured right) told me.

In December 2019, the company reported a $1.65 billion valuation. And the company says today’s funding round is one of the largest Series C rounds of all time — and likely the largest Series C round for an insurtech company more specifically.

“Almost all of the big existing investors are participating,” Teicke said. OMERS Ventures, G Squared, Mountain Partners, Merian, Horizons Ventures, Eurazeo, Mubadala Capital, Salesforce Ventures, Speedinvest, CE Innovation Capital, GR Capital and Seedcamp are all participating once again in this Wefox founding round. New investors include FinTLV, Ace & Co, LGT and its affiliated impact investing platform Lightrock, Partners Group, EDBI, Jupiter and Decisive.

“Not only have we raised a super large amount but also in a very fast time. It took us a total of four weeks to get all commitments in,” co-founder an CFO Fabian Wesemann (pictured left) told me.

Wefox believes it can now iterate and generate more and more revenue as it scales — it just needs capital to reach the next level. “We’re tackling that $5.2 trillion industry that has been stuck in the pre-internet era. We nailed how to disrupt it in our core market,” Teicke said.

But what makes Wefox different from legacy insurance companies? Wefox isn’t a direct-to-consumer insurance company. Most insurance products are still sold by agents and the startup believes this isn’t going to change anytime soon.

That’s why Wefox has 700 agents selling Wefox products exclusively. It also partners with associate brokers — around 5,000 can distribute Wefox products.

“While the rest of the industry seems to say that human agents are dead, we think they’re more relevant than ever,” Teicke said.

In 2020 alone, the company generated $140 million in revenue. If you look at Wefox Insurance, the company’s insurance carrier, the company reported a profit for 2020. As for the group, “we’re going to show overall profitability by 2023,” Wesemann said.

That fast growth rate combined with a clear path to profitability means that Wefox has an ambitious roadmap. As a full-stack insurance company licensed in Lichtenstein, Wefox can passport its license to other European countries. The company is currently live in five markets right now and is working on expanding to Italy soon.

In addition to new markets, Wefox plans to sell new insurance products — property and casualty insurance, pet insurance, health insurance, life insurance… If you’re thinking about an insurance product, chances are Wefox is already working on it. “This year we’re launching around 20 new insurance products,” Teicke said.

While distribution is managed decentrally with local agents talking with local customers, insurance products are managed centrally. The startup prioritizes products by revenue potential and goes down the list one product at a time.

Finally, Wefox has ambitious plans when it comes to reducing administrative costs. The company has been investing in automation so that common processes are handled by an algorithm. Currently, 80% of its processes are handled automatically. It’s a never-ending process as you have to adapt your processes when you launch new products.

Wefox is also working on prevention. The company has put together an AI team in Paris to prevent bad things from happening in the first place. As always with insurance companies, it’s all about optimizing every layer and every step of the customer journey to build a product that stands out from what’s already out there.