South African Insurtech firm Naked is planning to scale the business and accelerate its artificial intelligence (AI) ambitions, after securing $38 million (about R700 million) in its latest funding round.
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 and Germany’s development finance institution (DEG).
Claimed to be the largest insurtech investment in Africa to date, the Series B2 funding round enables Naked to accelerate its growth plans.
According to the company, the new funding will fuel Naked’s growth by deepening its investment in automation and AI, product and market expansion, and enhancing advertising to attract and grow its customer base.
Additionally, the funds will be used to meet the regulatory capital requirements tied to the rapid growth and evolution of Naked’s business.
“This investment marks an exciting milestone, as we continue to define a new category of insurance,” says Alex Thomson, co-founder of Naked.
“It’s a strong vote of confidence from both our existing shareholders and our new investor, BlueOrchard. Their support validates the success of our business model and highlights the significant progress we’ve made in making insurance more accessible and convenient.
“Building off the base of a loyal community and unique technology platform, we are positioned for strong growth in the years ahead.”
Launched in 2018 by actuaries Thomson, Sumarié Greybe and Ernest North, Naked reimagined insurance through a digital platform that leverages AI and automation to enable customers to obtain final insurance quotes and buy cover online.
Customers are also able to submit claims, or pause accident coverage, via the platform, without the need for any phone calls.
The company says it is the only platform in SA selling 100% of its car, home and single-item insurance policies online without human intervention.
Naked says it takes a fixed percentage of premiums and donates any surplus from unclaimed funds to causes chosen by its customers. This structure eliminates conflicts of interest in claims processing, fostering trust by ensuring valid claims are handled fairly and promptly, it notes.
According to Naked, 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,” says Richard Hardy, private equity investment director for Africa at BlueOrchard.
“This funding will help Naked broaden its reach and develop new products that strengthen the financial resilience of its customers.”
Naked recently announced it is setting up a “cell captive”, which means its cover will be underwritten by Hollard Specialist Insurance, but the company is required to provide the regulatory capital needed to act as protection for policyholders, or a buffer, that allows Naked to pay claims even in extreme loss scenarios.
Share