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Local insurtech firm Naked gets R160m funding

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Alex Thomson, co-founder of Naked.
Alex Thomson, co-founder of Naked.

Naspers, through its early-stage tech investment vehicle Naspers Foundry, announced a R120 million ($8.3 million) investment in Naked, an artificial intelligence (AI)-driven insurtech company that offers a new, fully digital way for consumers to insure their cars, homes, and valuables.

In total, Naked received R160 million with Naspers leading the round. Existing Naked investors, Yellowwoods and Hollard, also participated in the funding round, contributing R40 million.

The investors have endorsed Naked’s growth plans and its success in rebuilding insurance for social good. 

In a statement, Naspers says the transaction is Naspers Foundry’s second insurtech investment in two weeks and its biggest investment to date.

Last month, Naspers announced a R34 million investment in digital insurance advice platform, Ctrl.

The investments are part of Naspers’s R1.4 billion commitment to grow South Africa’s early-stage tech ecosystem through Naspers Foundry.

Co-founded by actuaries Alex Thomson, Sumarie Greybe, and Ernest North, Naked uses AI and automation to create a new type of insurance experience.

Built from scratch and free from legacy processes and systems, Naked is pioneering a business model that aims to restore trust in how insurance works, says Naspers.

It adds that consumers benefit from lower costs as well as more control of – and convenience in – their insurance experience.

They can 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, the company notes

Phuthi Mahanyele-Dabengwa, South Africa CEO of Naspers, says: “South Africans are 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.”

Fabian Whate, head of Naspers Foundry, comments: “We’re excited to support Naked in their 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.”

Alex Thomson, co-founder of Naked, notes: “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.

“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 SA market and enter into international markets.”

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