South African insurtech startup, Naked, has raised $17 million in a Series B round led by the International Finance Corporation. The German Development Finance Institution, Yellowwoods, and Hollards also participated in this round. This brings the total amount of funding raised by the startup to $31.6 million and comes more than a year after it closed a Series A round.
Launched in 2018 by insurance industry veterans, Alex Thomson, Sumarie Greybe, and Ernest North, Naked aims to bring trust and transparency to the insurance process.
Through its app and website, users can purchase insurance for their homes and cars in seconds while insurance claims are approved faster than traditional insurance providers. Taking a different approach from incumbents, Naked charges a fixed percentage on customers' premiums and where claims are low, the excess goes to causes chosen by the users.
For Thomson, the startup's Co-Founder, closing its Series B round is a vote of confidence in the startup's approach to insurance delivery. He also noted that it would help the startup grow its team and expand into new markets.
"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."
Adamou Labara, the IFC's South African Country Manager, added, "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."