South African insurtech company Naked has secured $38 million (R700 million) in a Series B2 funding round, marking its largest capital raise to date and a significant milestone in a sector that has seen limited activity in recent years. This milestone highlights the company’s impressive growth since its inception in 2018, during which it has consistently attracted significant investments. Global impact investor BlueOrchard led the round, joined by continued support from Hollard, Yellowwoods, the International Finance Corporation (IFC), and Germany’s DEG.
Naked’s latest R700-million Series B2 funding builds on earlier milestones, including R20 million in seed funding in 2018 and R160 million in Series A funding in 2021. This steady backing highlights strong investor confidence in Naked’s innovative, digital-first approach.
Co-founded by actuaries Alex Thomson, Sumarié Greybe, and Ernest North, Naked has set itself apart with a fully digital platform that harnesses the power of artificial intelligence (AI) and automation. Customers can obtain final insurance quotes in under 90 seconds, purchase coverage online, or even pause accident insurance through its user-friendly app—all without paperwork or needing to make a phone call.
Naked is the only platform in South Africa offering 100% of its car, home, and single-item insurance policies online, with no human intervention. This technological foundation enables the company to scale rapidly while maintaining cost-efficiency and transparency.
The funding arrives at a time when South Africa’s insurance industry has demonstrated remarkable resilience despite the headwinds of high interest rates and inflation. The country’s largest insurers, representing over 80% of the market, have maintained strong capital positions, reflecting the sector’s stability.
While South Africa boasts the highest insurance penetration in Africa, significant gaps remain: approximately 70% of vehicles on the country’s roads are uninsured, and life insurance adoption remains below 10%, excluding funeral cover. Naked addresses these challenges with its accessible, affordable solutions, offering a fresh alternative for underserved customers.
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The company’s “Naked Difference” business model eliminates traditional conflicts of interest by taking a fixed percentage of premiums and donating unclaimed funds to customer-chosen causes. This approach aligns with the broader industry shift towards sustainability and innovation, promoting trust and transparency while addressing economic inequality and fostering societal resilience.
The fresh capital will also position Naked to stay ahead of regulatory advancements, such as the introduction of IFRS 17 and increasing expectations for robust liquidity risk management by the Prudential Authority. By deepening investments in AI and automation, Naked continues to set the standard for governance and efficiency in an evolving regulatory landscape.
“This investment marks a significant milestone as we continue to define a new category of insurance,” said Alex Thomson, Naked’s co-founder. “It’s a strong vote of confidence from both existing and new investors, validating the success of our model and progress in making insurance more accessible.”
BlueOrchard’s involvement also reflects its strategy of leveraging technology for financial inclusion. “Naked’s use of technology to expand access to insurance aligns perfectly with our InsuResilience Investment Fund strategy,” said Richard Hardy, BlueOrchard’s private equity investment director for Africa.
While Naked’s immediate focus is South Africa, its AI-driven platform and customer-centric model could serve as a blueprint for untapped markets like East Africa, where insurance penetration rates are significantly lower. The company’s innovative approach sets a compelling precedent for addressing both market challenges and growth potential across the region.
As Naked looks to the future, the fresh capital will accelerate the expansion of its product offerings, fuel advertising efforts, and support regulatory compliance as it scales. By blending pioneering technology with a purpose-driven business model, Naked is in a strong position to reshape the South African insurance landscape while building trust, accessibility, and resilience for a more sustainable future.
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