South African insurtech firm Naked has made headlines by securing $38 million (R700 million) in its Series B2 funding round, which is the company’s largest capital raise to date.
This milestone not only showcases Naked’s rapid growth but also highlights its significant role in rejuvenating an industry that has seen limited activity in recent years. The round was led by global impact investor BlueOrchard, alongside continued backing from Hollard, Yellowwoods, the International Finance Corporation (IFC), and Germany’s DEG.
This funding builds on Naked’s impressive track record, which includes R20 million in seed funding in 2018, R160 million in Series A funding in 2021, and $17 million raised during its Series B round in February 2023. The consistent support from investors underscores confidence in Naked’s innovative, tech-driven approach to insurance.
Founded in 2018 by actuaries Alex Thomson, Sumarié Greybe, and Ernest North, Naked has differentiated itself with a fully digital platform powered by artificial intelligence (AI) and automation. Customers can secure final insurance quotes in under 90 seconds, purchase policies online, and even pause accident insurance—all through a seamless, paperless process on its user-friendly app. Naked is the only platform in South Africa offering 100% online car, home, and single-item insurance without the need for human intervention, enabling cost-efficiency and scalability.
This latest capital injection comes at a time when South Africa’s insurance sector has demonstrated resilience despite economic pressures such as high interest rates and inflation. While the country boasts the highest insurance penetration in Africa, significant gaps remain: nearly 70% of vehicles are uninsured, and life insurance penetration, excluding funeral cover, is below 10%. Naked’s affordable, accessible solutions aim to address these gaps, offering underserved customers an alternative to traditional insurance models.
Naked’s unique “Naked Difference” business model eliminates conflicts of interest by taking a fixed percentage of premiums and donating unclaimed funds to customer-nominated causes. This approach aligns with the industry’s shift towards sustainability and innovation, fostering transparency, trust, and social impact.
The new funding will support Naked’s continued investment in AI and automation, allowing it to stay ahead of evolving regulatory requirements such as IFRS 17 and stricter liquidity risk management standards mandated by the Prudential Authority. It will also enable the company to expand its product offerings, enhance advertising efforts, and explore growth opportunities beyond South Africa.
“This investment marks a pivotal moment for Naked as we continue to redefine the insurance landscape,” said Alex Thomson, co-founder of Naked. “It reflects the confidence of our investors and validates our progress in making insurance more accessible and transparent.”
BlueOrchard’s involvement highlights its commitment to leveraging technology for financial inclusion. “Naked’s innovative use of technology to expand insurance access perfectly aligns with our InsuResilience Investment Fund strategy,” noted Richard Hardy, BlueOrchard’s Private Equity Investment Director for Africa.
While Naked’s current focus is on South Africa, its AI-powered platform and customer-centric model offer a blueprint for addressing insurance challenges in underserved markets like East Africa, where penetration levels are significantly lower. By blending cutting-edge technology with a purpose-driven business model, Naked is positioned to not only transform the South African insurance sector but also set the stage for broader regional impact.
Main Image: Naked Insurance
