South African insurtech platform Naked has raised $11 million in a Naspers-led round. Existing investors Yellowwoods and Hollard also participated in the funding round.
This comes barely two weeks after Naspers, via its early-stage tech investment vehicle Naspers Foundry, invested in another South African insurtech platform, Ctrl, in its $2.3 million round.
Naked's latest investment is a Series A round. According to a statement released by the company, Naspers Foundry invested $8.3 million as the lead investor -- the largest the Naspers investment vehicle has made so far.
Founded in 2018 by Alex Thomson, Sumarie Greybe and Ernest North, Naked is a digital insurance platform covering cars, content, homes and standalone items. The company says it employs artificial intelligence to create new processes and experiences for its customers.
Africa's insurance sector is worth more than $68 billion in annual gross written premiums. South Africa makes up 70% of this market, with an annual gross written premiums market of over $47 billion. However, only a fraction of personal insurance is sold without human intervention.
But the pandemic has changed the way South African millennials want to consume insurance products these days. While 28% of South African millennials are in the market for insurance, 60% of them would prefer communicating with their insurer via the internet. For insurers, this online automation can reduce the cost of a claims journey by 30%.
This is where Naked comes in. On the platform, customers are presented with lower costs than they would ordinarily see in traditional insurance platforms, and more importantly, they have more control of 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 center agent," said the company in a statement.
Naked is built so that it does not plug into other insurance products in the market. Instead, the company built the product from the ground up, which allows it to add features that resonate with its customer base. One such feature allows customers to pause their car premiums whenever they're not driving during the lockdown. It is methods like this that Naked takes into consideration to improve insurance experiences for consumers.
“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...,” said co-founder Alex Thomson. “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.”
This investment is Naspers' seventh since launching its Foundry arm back in 2019. The $100 million fund targets South African early-stage tech companies looking to "address big societal needs."
Asides from the aforementioned insurtech platform Ctrl and now Naked, Naspers has also invested in five other South African companies -- mobility company WhereIsMyTransport; edtech platform The Student Hub; food tech startup Food Supply Network; agritech company Aerobotics; and home service platform SweepSouth.
“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,” head of Naspers Foundry Fabian Whate said in a statement.