Largest Insurtech Investment in Africa Propels Naked’s Growth Plans
South African insurtech pioneer Naked has raised $38 million (approximately R700 million) in a Series B2 funding round, marking the largest insurtech investment in Africa to date. The round attracted participation from global impact investment firm BlueOrchard, alongside increased support from existing investors, including Hollard, Yellowwoods, the International Finance Corporation (IFC), and Germany’s development finance institution (DEG).
Founded in 2018 by experienced actuaries Alex Thomson, Sumarié Greybe, and Ernest North, Naked has reimagined insurance with its fully digital platform. Using artificial intelligence (AI) and automation, Naked offers unmatched convenience and transparency. Customers can secure insurance quotes in under 90 seconds, purchase coverage, file claims, or pause accident coverage—all through a user-friendly app and without any phone calls.
As the only platform in South Africa offering 100% of its car, home, and single-item insurance policies online without human intervention, Naked has proven its ability to scale rapidly. Its proprietary technology not only enhances customer experience and reduces costs but also optimizes risk assessment and pricing for sustainable profitability.
Innovative Business Model: The Naked Difference
Naked’s innovative business model, known as the “Naked Difference,” sets it apart from traditional insurers. By taking a fixed percentage of premiums and donating any surplus from unclaimed funds to causes chosen by customers, Naked eliminates conflicts of interest in claims processing. This unique approach fosters trust by ensuring valid claims are resolved fairly and efficiently, positioning Naked as a modern, purpose-driven alternative in an industry often perceived as rigid and transactional.
Funding to Drive Growth and Innovation
The newly secured funding will enable Naked to accelerate its growth by:
– Investing further in automation and AI to enhance customer experience.
– Expanding its product offerings and market reach.
– Boosting marketing efforts to attract and retain a broader customer base.
– Meeting regulatory capital requirements associated with its rapid growth.
“This investment represents a major milestone in our journey to redefine insurance,” said Alex Thomson, co-founder of Naked. “The continued support from our existing investors and the addition of BlueOrchard validates the success of our business model and underscores the significant progress we’ve made. With a loyal customer base and a unique technology platform, we are poised for significant growth in the coming years. We are deeply grateful to South African consumers for embracing a new era of insurance and to our investors for their confidence in our vision.”
BlueOrchard’s Commitment to Financial Inclusion
BlueOrchard’s investment aligns with its mission to leverage 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,” said Richard Hardy, Private Equity Investment Director for Africa at BlueOrchard. “This funding will support Naked in broadening its reach and developing new products that strengthen the financial resilience of its customers.”
Strengthening Financial Stability
Naked recently announced the establishment of a “cell captive,” under which its policies will be underwritten by Hollard Specialist Insurance (HSI). To ensure financial stability and the ability to pay claims even in extreme scenarios, Naked is required to maintain regulatory capital as a protective buffer for its policyholders.
About Naked
Naked is South Africa’s first fully digital insurance platform, offering comprehensive and instant coverage for cars, homes, contents, and standalone items. Leveraging AI and automation, Naked delivers a seamless and transparent insurance experience, free from the inefficiencies of legacy systems. Customers can obtain final insurance quotes, adjust coverage, and manage policies online in less than 90 seconds without interacting with a contact center agent.
The “Naked Difference” business model ensures a conflict-free claims process by donating surplus unclaimed funds to customer-selected causes. This approach not only restores trust in the insurance industry but also creates a more equitable system for all stakeholders.
Naked Financial Technology (Pty) Ltd is an authorized financial services provider (FSP 48822). Policies are underwritten by The Hollard Insurance Company Limited (and soon, The Hollard Specialist Insurance Limited), both licensed insurers and authorized financial services providers.
For more information on Naked and its award-winning app, visit www.naked.insure.
