- Naked Insurance has announced that it raised R290 million in its Series B funding round
- The round was lead by the International Finance Corporation.
- Other investors in this round include the German Development Finance Institution, Yellowwoods and Hollard.
Local insurtech firm Naked has a unique product offering and it turns out that the product is a particularly attractive investment.
This as the company has announced that it raised R290 million during its Series B funding round. The funding round was led by the International Finance Corporation with the German Development Finance Institution, Yellowwoods and Hollard also participating.
“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,” co-founder of Naked, Alex Thomson said in a statement.
“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,” Thomson added.
What makes Naked unique is not only the way it allows customers to pause and resume their vehicle cover as and when they need it, customers have full autonomy over their cover including being able to file claims
The firm also pushes surplus profits to communities and good causes selected by those customers rather than swallowing the funds. This is accomplished through Naked charging a fixed percentage of customers’ premiums. In years where claims are lower, extraneous profits are redirected to the above causes.
The International Finance Corporation says that it has chosen to participate in this funding round as Naked has the potential to increase the penetration of tech-driven insurance in the local market.
“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 Country Manager for South Africa, Adamou Labara said in a statement.
Adding to this, Ingo Schulz, vice president at The German Development Finance Institution’s InsurTech Global Markets division said, “We believe that Naked is well positioned to drive digital transformation and inclusion in the South African insurance industry because of its unique technology and innovative business model. We recognize the enormous commercial potential in increasing access to insurance through the use of smart technology. We’re excited to partner with Naked, not only as the leader in this space, but also as a business that will have a significant positive social and developmental impact.”
Another driver of Naked’s success locally is its referral programme. By May 2022, the firm had paid out over R1 million in referral rewards. This programme gives customers the chance to earn back up to R1 000 for customers that sign up using their unique referral code.