Wefox Holding AG is replacing Chief Executive Officer Mark Hartigan after the German insurance tech startup’s board rejected a proposal by its largest stakeholder, Mubadala Investment Co., that he backed to sell the company.

Hartigan, who took the position in March to restructure the cash-strapped company, will be replaced by the end of the year, according to people familiar with the plan, who asked not to be identified because the information is private.

The board also approved a convertible loan agreement prepared by investors Chrysalis Investments and Target Global for about €25 million ($27 million) and will seek to raise more money, the people said. Wefox is in talks to sell e-bike insurer Assona, which it expects will raise at least €50 million, they said.

Wefox, Mubadala, Chrysalis and Target declined to comment. Hartigan did not immediately respond to a request for comment.

The setback for Mubadala comes as the $300 billion Abu Dhabi wealth fund becomes more aggressive at unprofitable startups it invested in when low interest rates fueled a boom in venture capital. This week, Mubadala agreed to take a controlling stake in Turkish food delivery firm Getir and will replace its CEO as part of a deal to raise money for the company.

Wefox, which operates in eight countries and has more than 2 million customers, is running out of cash as funding requirements for the insurance business strain its finances. Mubadala had proposed selling the struggling company to UK insurance broker Ardonagh Group Ltd.

Mubadala hasn’t committed to the financing round and continues to evaluate its options, the people said.

Hartigan, who previously was an executive at Zurich Insurance Group AG and headed LV=, was brought on at Wefox last year as non-executive chairman. He replaced co-founder Julian Teicke as CEO in March as Wefox’s financial situation worsened.

Read More: Mubadala Proposal to Sell InsurTech Startup Wefox Opposed by Founders

The Berlin-based company lost more than €100 million last year and faces as much as €70 million in fresh capital needs through the end of 2024, according to a Mubadala presentation from this month that was seen by Bloomberg News.

Wefox’s founders and some of the company’s early backers opposed a sale to Ardonagh, which gave the startup an enterprise value of as much as €550 million, because it put them at risk of losing their entire investment, Bloomberg reported previously. Wefox was valued at $4.5 billion in a Mubadala-led funding round two years ago.

An extraordinary meeting of Wefox’s shareholders is scheduled for Friday.

Photograph: Signage for Mubadala at the company’s pavilion at the Dubai Air Show in Dubai, United Arab Emirates, on Monday, Nov. 13, 2023. Photo credit: Christopher Pike/Bloomberg

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