South African insurtech company Naked has successfully completed a $38 million (approximately R700 million) Series B2 funding round. This round was led by global impact investor BlueOrchard and saw increased participation from existing investors, including Hollard, Yellowwoods, the International Finance Corporation (IFC), and Germany’s development finance institution, DEG.
The newly secured funding will enable Naked to deepen its investment in automation and AI, expand its product offerings and market reach, and enhance advertising efforts to grow its customer base. Additionally, the funds will help meet regulatory capital requirements associated with the company’s rapid growth.
This latest funding round builds on Naked’s success in securing $17 million in a Series B round in February 2023, which was led by the IFC and joined by Yellowwoods, Hollard, and DEG. The Series B raised the company’s total funding at the time to $31.6 million, setting the stage for the continued growth and innovation reflected in the current Series B2 round.
Launched in 2018 by actuaries Alex Thomson, Sumarié Greybe, and Ernest North, Naked has developed a fully digital insurance platform that leverages artificial intelligence (AI) and automation to enhance customer experience. Through its mobile application, customers can obtain final insurance quotes in under 90 seconds, purchase coverage online, submit claims, or pause accident coverage without the need for phone calls.
The company distinguishes itself with its “Naked Difference” business model. Unlike traditional insurers, Naked takes a fixed percentage of premiums to operate, allocating any surplus from unclaimed funds to causes selected by its customers. This approach removes conflicts of interest in claims processing, fostering trust by ensuring valid claims are handled fairly and promptly.
Since its inception, Naked has expanded its services to include fully digital car and home insurance, allowing customers to manage their entire insurance experience online. The platform offers comprehensive and instant coverage for cars, homes, contents, and standalone items, using AI and automation to create a new type of insurance experience.
This investment underscores the growing trend of digital transformation in the insurance industry. By utilizing AI and automation, companies like Naked are enhancing efficiency, reducing costs, and improving customer satisfaction. The support from prominent investors highlights confidence in Naked’s innovative approach and its potential to reshape the insurance landscape in South Africa and beyond.
Looking ahead, Naked plans to continue leveraging technology to expand access to insurance, aligning with broader goals of enhancing financial inclusion. The company aims to broaden its reach and develop new products that strengthen the financial resilience of its customers, contributing to the overall growth and modernization of the insurance sector.
