Leading investors in Wefox, the troubled European insurance company, are engineering a €150m (£125m) refinancing to avert the need to sell one of its most valuable remaining assets.
Sky News has learnt that Wefox shareholders including Chrysalis and Target Global are orchestrating a fresh share sale to raise between €60m and €80m.
The company is also understood to be planning to refinance a €70m revolving credit facility, according to insiders.
Money latest: The most and least affordable towns to buy a home
Investors are understood to have been given until Friday to register their interest in the share sale.
The cash call is designed to be an alternative to a sale of TAF, one of its prized subsidiaries.
Wefox is also backed by prominent investors including the Abu Dhabi state fund Mubadala.
M&S and Kingfisher among suitors circling Homebase stores
Latest sign of struggling industry as car production falls for eighth month in a row – SMMT
Money blog: Anger as Manchester United raise ticket prices to cover operational costs
The company has twice this year warned that it faced running out of money within months.
Sources said, however, that securing a new capital injection would put Wefox on a sustainable medium-term footing.
Wefox has been ravaged by losses in a number of its key markets including Italy, although its operations in the Netherlands remain profitable.
The company was valued at $4.5bn (£3.6bn) in a funding round less than two years ago and counts Barclays and JP Morgan among its lenders.
It is now valued at far less than the $1bn needed to preserve its status as a tech unicorn.
Earlier this year, the company bought itself time by raising roughly €20m from existing investors, while it has also sold Assona, a subsidiary which offers insurance cover for electric bikes.
Founded in 2015, Wefox sells insurance products through in-house and external insurance brokers, and has frequently boasted of its ambition of revolutionising the insurance industry through the use of technology.
It has more than two million customers across its business.
In July 2022, Wefox raised a $400m Series D funding round valuing it at $4.5bn, making it one of the largest fintechs in Europe.
Be the first to get Breaking News
Install the Sky News app for free
Read more from Sky News:
Direct Line shares soar as it rejects UK rival’s takeover offer
Latest sign of struggling car industry as production falls again
‘Name and shame’ compromise by City watchdog
That followed a $650m round in May 2021 valuing it at $3bn, reflecting the frothy appetite of investors to back scale-ups regarded as having the potential to become global competitors of genuine scale.
It then secured a further $55m in equity financing and the same amount in debt funding from Barclays and JP Morgan a year ago.
Wefox could not be reached for comment.
