South Africa: Naked raises $17m from IFC, others

Naked – the South African artificial intelligence (AI)-driven insurtech company that offers a fully digital way for consumers to insure their cars, homes and valuables – has raised $17 million in Series B funding.

The funding round was led by the International Finance Corporation (IFC), while German development finance institution DEG and Naked’s original investors, Yellowwoods and Hollard, also participated.

Naked was founded by actuaries Alex Thomson, Sumarie Greybe, and Ernest North, with a vision of creating a more accessible, convenient and transparent insurance experience. They started developing the concept and systems in 2016, launched in 2018 and are now fast scaling the business.

Alex Thomson, co-founder of Naked said, “More than five years ago, we set out to create an insurance platform that people would love for being fair, convenient, and transparent, at game-changing prices. Since our launch in 2018, we have been overwhelmed by customers’ enthusiasm for our offering and have exceeded our growth targets every year.

“We are excited to bring new investors on board in this funding round as part of accelerating our growth plans. This investment validates our position as a pioneer of fully digital insurance in South Africa, and will enable us to grow our team, continue to invest in technology that puts customers in control, and to expand into new markets.”

Adamou Labara, IFC country manager for South Africa commented, “Improving access to insurance products is a key driver of financial inclusion in South Africa as it has the potential to preserve assets, increase incomes and reduce uncertainties. IFC’s investment in Naked will help increase the penetration of tech-driven insurance in the country and contribute to job creation and economic growth.”

Ingo Schulz, vice president at DEG InsurTech Global Markets added, “We believe that Naked is well positioned to drive digital transformation and inclusion in the South African insurance industry because of its unique technology and innovative business model. We recognise the enormous commercial potential in increasing access to insurance through the use of smart technology. We’re excited to partner with Naked, not only as the leader in this space, but also as a business that will have a significant positive social and developmental impact.”