Naked, a South African insurtech firm, has recently secured $38 million (R700 million) in its latest funding round, known as Series B2. This significant achievement marks the company’s largest capital raise to date and highlights its impressive growth trajectory since its inception in 2018. The round was led by global impact investor BlueOrchard, with continued support from key investors such as Hollard, Yellowwoods, the International Finance Corporation (IFC), and Germany’s DEG.
Naked’s success in raising funds follows its previous milestones, including a seed funding round of R20 million in 2018 and a Series A funding round of R160 million in 2021. This consistent backing from investors underscores the confidence in Naked’s innovative and digital-first business model.
Co-founded by actuaries Alex Thomson, Sumarié Greybe, and Ernest North, Naked differentiates itself with its fully digital platform that utilizes artificial intelligence (AI) and automation. Customers can receive insurance quotes within 90 seconds, purchase coverage online, and pause accident insurance through a seamless and paperless process via its user-friendly app. Naked is the only platform in South Africa offering 100% online car, home, and single-item insurance policies without the need for human intervention, allowing for rapid scalability and cost-efficiency.
The funding comes at a time when South Africa’s insurance sector has demonstrated resilience amidst economic challenges. Despite being the African country with the highest insurance penetration, there are significant gaps in insurance coverage, particularly in vehicle and life insurance. Naked aims to address these gaps by providing accessible and affordable insurance solutions to underserved customers.
Naked’s unique “Naked Difference” business model eliminates traditional conflicts of interest by taking a fixed percentage of premiums and donating unclaimed funds to customer-selected causes. This model aligns with the industry’s focus on sustainability and innovation, fostering trust and transparency while addressing economic inequality.
The new capital infusion will enable Naked to stay ahead of regulatory changes and enhance its technological capabilities, particularly in AI and automation. By investing in these areas, Naked aims to uphold its leadership in governance and efficiency amid evolving regulatory requirements.
Looking ahead, Naked plans to expand its product offerings, improve advertising strategies, and ensure regulatory compliance as it continues to grow. The company’s innovative approach and customer-centric model position it as a potential blueprint for other underserved markets, such as East Africa, where insurance penetration is lower.
With its cutting-edge technology and purpose-driven business model, Naked is poised to redefine the South African insurance landscape, promoting accessibility, trust, and resilience for a more sustainable future.
