The axe has reportedly fallen at embattled insurtech Wefox.
Chief executive officer Mark Hartigan is heading to the exit, according to sources, after the startup rejected a proposal from its most significant stakeholder – Mubadala Investment Co. – to sell the company. Hartigan had backed the proposed move.
Hartigan had only moved into the role in March in a bid to restructure the cash-strapped firm. Now he is set to be replaced by the end of the year.
That’s according to “people familiar with the plan” who spoke to Bloomberg News and asked not to be identified due to the information being private. Hartigan was previously an executive with Zurich and headed LV=. He replaced co-founder Julian Teicke when he moved into the role at Wefox, having previously been a non-executive chairman at the firm.
It was stated in the report that the board had approved a convertible loan agreement that had been prepared by its investors Target Global and Chrysalis Investments, thought to be worth around €25 million. The aim is to raise more money, according to the sources, with Wefox also allegedly in talks to sell its e-bike insurer Assona.
According to the same report, Wefox, Chrysalis, Target and Mubadala declined to comment while Hartigan did not respond to a request.
Currently, Wefox has operations across eight countries and boasts more than two million customers. However, it is reported that funding requirements for the insurance business are placing a strain on its finances. There had been a proposal in place from Mubadala to sell the company to Ardonagh.
According to sources, Mubadala hasn’t committed to the financing round and is currently examining its options.
It is estimated that the Berlin-based insurtech saw losses in excess of €100 million last year and requires a further €70 million in fresh capital through this year.
An extraordinary meeting of the company’s shareholders, according to Bloomberg, has been put in place for Friday.
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