The International Finance Corporation led a $17 million Series B round of funding for the South African insurtech startup, Naked. This round also included participation from Yellowwoods, Hollards, and the German Development Finance Institution. This comes more than a year after the business closed a Series A investment, bringing its total funding to $31.6 million.
Alex Thomson, Sumarie Greybe, and Ernest North, seasoned professionals in the insurance industry, launched Naked in 2018 with the goal of enhancing trust and openness in the insurance process.
Users can quickly obtain house and auto insurance using its app and website, and insurance claims are processed more quickly than through traditional insurance providers. In contrast to incumbents, Naked charges a fixed proportion of premiums, with any excess going to the users’ preferred charities in cases where claims are minimal.
Adamou Labara, the IFC’s South African Country Manager, said, “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.”
The startup’s co-founder, Alex Thomson, sees the closure of its Series B round as a vote of confidence in its strategy for delivering insurance. He added that it will aid the startup’s staff expansion and market penetration.
“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.”