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  • 📈 Wefox’s €170m Lifeline: A Bold Reset

📈 Wefox’s €170m Lifeline: A Bold Reset

Starmer's Growth Gambit: Regulators on Notice

December 30, 2024

This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes

In today’s stories:

  • Wefox’s €170m Lifeline: A Bold Reset

  • Starmer's Growth Gambit: Regulators on Notice

  • Gatwick Fog: Festive Flights Facing Delays!

The summary: Once a $4.5bn fintech star, Wefox is fighting to keep its tech-driven insurance dreams alive with a €170m lifeline from Searchlight and loyal investors, proving there’s still life in the old unicorn yet!

The details:

  • Searchlight to the rescue: Private equity giant Searchlight Capital is swooping in to refinance Wefox’s bank debt with a €170m (£141m) package, saving the European insurance disruptor from a potential fire sale.

  • Fresh cash injection: The deal includes an equity raise of €80m-€100m (£66.5m-£83.1m), with backing from shareholders like Chrysalis and Target Global to stave off financial peril.

  • Unicorn no more: Once valued at $4.5bn (£3.6bn), Wefox’s worth has plunged below $1bn (£796m), losing its unicorn status amid mounting losses in key markets like Italy—though Dutch operations still shine.

  • Survival tactics: Having already sold subsidiaries and inked deals to stay afloat, Wefox is betting on tech-powered insurance for its 2 million customers while fending off creditors like Barclays and JP Morgan.

Why it matters: Wefox's tumble from a $4.5bn darling to a company scrambling for cash is a stark reminder that even the shiniest fintechs can lose their sparkle when the market turns sour. The rescue plan led by Searchlight shows private equity’s knack for spotting opportunity in chaos, while existing backers scramble to avoid writing off their investments entirely. For Wefox, it’s a case of staying afloat long enough to prove its tech-powered insurance model isn’t just a flashy sales pitch.

The summary: Keir Starmer’s government is rallying regulators to cut the red tape and spark economic growth, blending bold ambition with a dash of political irony as Labour borrows a trick from the Tory playbook.

The details:

  • Regulators on the Clock: Sir Keir and his Cabinet sent a festive letter to watchdogs like Ofgem and Ofwat, urging them to conjure up "pro-growth" reforms by mid-January. A novel approach: asking regulators to regulate themselves into boosting the economy!

  • Economic Flatlining: With the UK economy stuck in neutral (July to September stats confirm), Labour’s push to outgrow the G7 feels like a pep talk at half-time – ambitious, but the scoreboard says otherwise.

  • Tories Cry Foul: Shadow Business Secretary Andrew Griffith dubbed the letter "a begging note," pinning the blame for economic woes on Labour's budget. The PM's vow to tackle "naysayer" regulators? More Conservative than you’d expect.

  • Regulatory Tug-of-War: Sir Keir’s "slash the red tape" mantra isn’t impressing everyone. Critics argue those so-called obstacles are safeguards, not shackles. Meanwhile, the FCA and others are playing ball – though they remind us they've been at it since summer.

Why it matters: Keir Starmer’s government is trying to turbocharge the UK economy by leaning on regulators to ditch the red tape and embrace investment-friendly reforms – a move that’s equal parts bold and desperate. The irony? Labour’s borrowing a play from the Conservative handbook, sparking a political spat that’s more entertaining than the Christmas telly lineup. Meanwhile, businesses and regulators are left wondering if this is genuine reform or just another New Year’s resolution destined to fizzle out by February.

The summary: Gatwick’s festive fog fiasco continues with delays and cancellations, but with a bit of patience (and perhaps some snacks), things should clear up soon enough!

The details:

  • Foggy Fiasco Lingers: Gatwick's been in a haze (literally) since Friday, with lingering fog causing chaos and prompting temporary air traffic restrictions. Monday saw 20 more flights axed to keep things manageable.

  • Delays Drag On: While Monday’s forecast is dry and breezy, the weekend's fog threw flight schedules into disarray. Delays are expected to continue as planes and pilots play catch-up.

  • Passenger Perks: If you're stuck waiting more than two hours, airlines may owe you food, drinks, or even a cozy overnight stay. A silver lining to the turbulence?

  • Nationwide Nuisance: Gatwick wasn't alone in the foggy fray—Manchester, Glasgow, and Cardiff airports also faced festive flight disruptions. It’s the season of giving... flight delays, apparently.

Why it matters: Well, if you're flying out of Gatwick, prepare for more than just turbulence – delays and cancellations are the festive freebies on offer. With planes out of sync and air traffic control still untangling the mess, it's like a game of catch-up, only no one's winning. So, while the fog lifts, don’t expect smooth skies just yet – you might need to pack a bit more patience (and maybe some snacks) for the journey ahead.