South African insurtech startup Naked, a fully digital insurance platform offering comprehensive and instant cover for cars, homes, contents, and standalone items, has raised a ZAR160 million (US$11 million) Series A funding round led by Naspers Foundry to boost its growth plans.
Co-founded by actuaries Alex Thomson, Sumarie Greybe, and Ernest North, Naked, which launched to market in 2018, uses AI and automation to create a new type of insurance experience.
Consumers benefit from lower costs as well as more control of – and convenience in – their insurance experience, being able to get a final insurance quote for their home, its contents, their standalone items or their car in less than 90 seconds, and switch or pause their cover, all online, without speaking to a contact centre agent.
To help it speed its growth, Naked has raised a ZAR160 million (US$11 million) Series A funding round. The round is led by Naspers, which has invested ZAR120 million (US$8.3 million), with the balance of the round funded by existing investors Yellowwoods and Hollard. It is the largest investment yet made by Naspers, which is one of the largest technology investors in the world, via its ZAR1.4 billion (US$96 million) Foundry fund, launched in October 2018. Naspers Foundry has previously invested in SweepSouth, Aerobotics, Food Supply Network, The Student Hub, WhereIsMyTransport and Ctrl.
Naked will use the funding to support its growth plans and its success in rebuilding insurance for social good.
“Our ambition is to build insurance that people love by offering an experience that is affordable, convenient and transparent. We have come a long way since our launch in 2018 towards meeting these goals, including enabling customers to buy cover online in seconds, allowing them to claim and manage cover on our award-winning app, and passing on huge savings through sustainably lower premiums,” said Thomson.
“But this is just the start of our journey to reinvent insurance. We are excited to have an investor of Naspers Foundry’s calibre onboard to work with us as we expand our team, continue to invest in the technology that puts customers in control, meet the insurance needs of a growing portion of the South Africa market and enter into international markets.”
Phuthi Mahanyele-Dabengwa, South Africa chief executive officer (CEO) of Naspers, said South Africans were in general underinsured when it comes to short-term personal insurance.
“While this is often due to price, consumer distrust and complexity have led to a misunderstanding of insurance. Naked’s offering is convenient, transparent and passes the cost savings from its innovative technology on to customers. It improves financial inclusion, in line with Naspers Foundry’s objective of investing in technology businesses that have a positive impact on society,” she said.
Naspers Foundry head Fabian Whate said the fund was excited to support Naked in its journey of pioneering a new generation of insurance, giving consumers access to convenience, control and savings with its end-to-end digital processes.
“This fits in with our focus of backing purpose-driven technology businesses. Investing in Naked is consistent with the portfolio we’ve built to date and Naspers Foundry’s healthy pipeline of potential future investments,” he said.