Naspers Invests $11M in South African Insurtech Naked

Naked, a South African Insurtech, Secures $11 Million in Funding

Naked, a South African insurance technology platform, has successfully raised $11 million in a funding round spearheaded by Naspers. The investment round also saw participation from existing investors, Yellowwoods and Hollard.

Recent Naspers Investments in South African Insurtech

This funding announcement arrives shortly after Naspers Foundry, Naspers’ early-stage tech investment division, invested $2.3 million in another South African insurtech company, Ctrl. This demonstrates a clear focus on the growing insurtech sector within the region.

Details of the Series A Funding

The current investment represents a Series A round for Naked. Naspers Foundry contributed $8.3 million as the lead investor, marking its largest single investment to date.

About Naked: A Digital Insurance Platform

Established in 2018 by Alex Thomson, Sumarie Greybe, and Ernest North, Naked operates as a fully digital insurance platform. It provides coverage for vehicles, possessions, homes, and individual items. The company leverages artificial intelligence to streamline processes and enhance the customer experience.

The Size of the African Insurance Market

The African insurance industry is substantial, boasting an annual gross written premium value exceeding $68 billion. South Africa constitutes a significant 70% of this market, with a gross written premium value surpassing $47 billion annually.

Shifting Consumer Preferences and the Rise of Digital Insurance

Despite the market size, a limited proportion of personal insurance is currently sold without direct human interaction. However, the recent pandemic has altered the preferences of South African millennials regarding insurance consumption.

Currently, 28% of South African millennials are actively seeking insurance, and a substantial 60% favor communicating with their insurers online. This shift towards online automation has the potential to reduce claims processing costs for insurers by up to 30%.

How Naked Addresses the Evolving Insurance Landscape

Naked directly addresses these evolving needs. The platform offers customers lower costs compared to traditional insurance providers, and crucially, provides greater control over their insurance experience.

Customers can obtain a comprehensive insurance quote for their home, contents, or vehicle in under 90 seconds. They also have the ability to modify or temporarily suspend their coverage entirely online, without needing to contact a customer service representative.

Naked’s Unique Approach to Insurance Technology

Naked distinguishes itself by building its platform from the ground up, rather than integrating with existing insurance products. This approach allows for the incorporation of features specifically designed to resonate with its customer base.

A prime example is the ability for customers to pause their car premiums during periods of inactivity, such as during lockdown restrictions. This demonstrates Naked’s commitment to improving the overall insurance experience for consumers.

Future Plans and Expansion

“Our ambition is to build insurance that people love by offering an experience that is affordable, convenient and transparent,” stated co-founder Alex Thomson. “We have come a long way since our launch in 2018 towards meeting these goals… But this is just the start of our journey to reinvent insurance. We are excited to have an investor of Naspers Foundry’s caliber on board 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.”

Naspers Foundry’s Investment Strategy

This investment marks Naspers’ seventh since the launch of its Foundry arm in 2019. The $100 million fund is focused on supporting early-stage South African tech companies that aim to tackle significant societal challenges.

Naspers Foundry’s Portfolio of South African Companies

Beyond Ctrl and Naked, Naspers has also invested in five other South African businesses: WhereIsMyTransport (mobility), The Student Hub (edtech), Food Supply Network (food tech), Aerobotics (agritech), and SweepSouth (home services).

Naspers’ Perspective on the Investment

“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,” commented Fabian Whate, head of Naspers Foundry.