South African Insurtech Naked Secures US$38m Series B2

Naked, a South African digital insurance platform that uses artificial intelligence to provide instant coverage, has raised R700 million (US$38m) in Series B2 funding led by global impact investor BlueOrchard.
The round, which represents the largest insurtech investment in Africa, includes participation from existing investors Hollard Insurance Group, Yellowwoods investment holding company, International Finance Corporation and DEG, the German development finance institution.
Technology-driven growth
Naked's platform, which launched in 2018, enables customers to purchase car, home and single-item insurance policies through a mobile application without human interaction.
The technology uses AI algorithms to assess risk and generate quotes within 90 seconds while allowing users to submit claims and modify coverage directly through the platform.
The company's automated underwriting system aims to improve risk selection and pricing efficiency, which it reports has led to profitable unit economics.
The platform currently processes all insurance sales without human intervention, a feature that sets it apart from traditional insurers in the South African market.
“This investment marks an exciting milestone as we continue to define a new category of insurance"
Regulatory capital deployment
The new capital will be allocated to enhance the company's AI capabilities and meet regulatory requirements.
A portion of the funding will support the establishment of a cell captive structure within Hollard Specialist Insurance, requiring Naked to maintain capital reserves for extreme loss scenarios.
The company operates on a fixed-percentage revenue model, with surplus funds from unclaimed premiums directed to charitable causes selected by policyholders.
This structure aims to address potential conflicts of interest in claims processing.
Alex Thomson, co-founder of Naked, says: “This investment marks an exciting milestone as we continue to define a new category of insurance. It's a strong vote of confidence from both our existing shareholders and our new investor, BlueOrchard.”
Richard Hardy, Private Equity Investment Director for Africa at BlueOrchard, adds: “Naked's focus on using technology to expand access to insurance fits perfectly with our InsuResilience Investment Fund strategy. This funding will help Naked broaden its reach and develop new products that strengthen the financial resilience of its customers.”
Exploring Naked
The company, which operates as Naked Financial Technology Ltd under South African financial services provider license 48822, represents a departure from traditional insurance models in the region.
The platform was developed without integration of legacy systems, enabling rapid deployment of new features and policy modifications.
Naked's underwriting is handled by The Hollard Insurance Company Limited, with plans to expand through The Hollard Specialist Insurance Limited.
The platform covers automotive, residential and individual item insurance, with policies managed through its mobile application.
The company's revenue structure differs from conventional insurers through its fixed-percentage model. Rather than retaining unused premiums as profit, the company channels surplus funds to charitable organisations.
This approach aims to remove financial incentives that could influence claims processing decisions.
Company actuaries Alex Thomson, Sumarié Greybe and Ernest North developed the platform to address inefficiencies in traditional insurance distribution.
The system enables policy modifications, including the ability to pause accident coverage, without requiring contact centre intervention.
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