![[South Africa] IFC leads a $17m investement in insurtech startup Naked](Images/Key Logos/Naked Insurtech.jpg)
[South Africa] IFC leads a $17m investement in insurtech startup Naked
Naked the South African artificial intelligence (AI)-driven insurtech company has raised $17 million (about R290 million) in Series B Funding.
The raise was led by International Finance Corporation (IFC) with participation from The German Development Finance Institution (DEG), and Naked’s original investors, Yellowwoods and Hollard.
Founded in 2018 was by actuaries Alex Thomson, Sumarie Greybe, and Ernest North, with a vision of creating a more accessible, convenient and transparent insurance experience. The firm offers a new, fully digital way for consumers to insure their cars, homes, and valuables. Naked has built an end-to-end digital platform that enables customers to manage their entire insurance experience online from an award-winning app.
From getting a quote and buying insurance to managing their policy and claiming, Naked customers can do it all without speaking to a contact centre agent. Naked’s AI-based system offers unmatched customer convenience, and also enables the company to reap significant cost savings from automation and pass them on to customers in the form of lower premiums.
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.”
Other than its technology, Naked's business model is also different from traditional insurance firms where insurers’ profits depend on how much they pay in claims. Naked charges a fixed percentage of customers’ premiums. In years when claims are lower than expected, the surplus goes to communities and good causes chosen by customers. This approach is called the Naked Difference. It removes the conflict of interest at the heart of traditional insurance from Naked’s business model—it means Naked isn’t thinking about profits when it processes claims.
