Insurance unicorn Wefox has warned investors that it may soon face insolvency due to financial losses and regulatory charges.
CEO Mark Hartigan sent a memo to shareholders in early May, stating that the business could become insolvent in August this year or earlier, according to Sky News.
Hartigan wrote in the memo: “The opportunity to rebuild through restructuring and any optionality for the future remains dependent upon reaching [a] sustainable position by balancing cashflows with the timing of our planned disposals.
“The increasing demands on Group cash from country demands to stay solvent, from the Regulatory requirements for upfront carrier capital, from business disruption from increased media leading to partner uncertainty, from the control of cash and increased costs related to the [Revolving Credit Facility], leads me to remain very concerned that this balance will be disrupted.”
This news comes amongst job cuts amongst the Wefox ranks and shutdowns of their offices in Italy, Germany, Poland, and Switzerland.
The company was valued at £3.6 billion less than two year ago, with lenders including Barclays and JP Morgan, but has since been descending into crisis. Wefox was founded in 2015 and has since amassed 3 million customers globally.
In 2023, Wefox secured £55 million in funding.
Wefox maintains that they are closing international offices to save costs and continue with their business model.
