Naked, a South African Insurtech company, has secured $38 million (about R700m) in its latest funding round as it moves to improve its technology-driven convenience, transparency and cost-effectiveness.
The Series B2 funding round was joined by global impact investor BlueOrchard and also saw increased support from existing backers Hollard, Yellowwoods, International Finance Corporation (IFC), and Germany’s development finance institution (DEG), the company said Tuesday.
Launched in 2018 by actuaries Alex Thomson, Sumarié Greybe, and Ernest North, Naked re-imagined insurance through a digital platform that leverages artificial intelligence (AI) and automation. Its app enables customers to obtain final insurance quotes in under 90 seconds and buy cover online, submit claims, or pause accident coverage, all without the need for any phone calls.
As the only platform in South Africa selling 100% of its car, home, and single-item insurance policies online without human intervention, Naked has scaled rapidly. Its proprietary technology claims to enhance convenience, cost savings, risk selection, and pricing, a statement said.
Co-founder Alex Thompson said the new funding would fuel Naked’s growth by deepening its investment in automation and AI, product and market expansion, and enhance advertising to grow its customer base. The funds would also be used to meet the regulatory capital requirements tied to the rapid growth and evolution of Naked’s business.
“It’s a strong vote of confidence from our existing shareholders and our new investor, BlueOrchard. Building off the base of a loyal community and unique technology platform, we are positioned for strong growth in the years ahead,” said Thompson.
BlueOrchard Private Equity Investment director Richard Hardy said in a statement that BlueOrchard's investment aligns with its goal of leveraging digital innovation to enhance financial inclusion.
“Naked’s focus on using technology to expand access to insurance fits perfectly with our InsuResilience Investment Fund strategy,” he said.
Naked recently announced plans to set up a “cell captive” - which means its cover will be underwritten by the Hollard Specialist Insurance Company, but Naked is required to provide the regulatory capital to act as protection for policyholders, or a buffer that allows it to pay out claims in extreme loss situations.
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