IFC leads $17M investment in South African insurtech Naked
Summary
Naked Insurance, a South African insurtech company that helps consumers to insure their cars, homes and valuables, has raised $17 million in Series B funding led by the International Finance Corporation (IFC).The round welcomed participation from the German Development Finance Institution (DEG) and earlier investors Yellowwoods and Hollard. The news follows the Naspers-led $11 million Series A round that the South African insurtech announced in August 2021.According to a statement, the funding presents Naked with an opportunity to improve its AI and use it to grow Africas insurance market worth over $68 billion in annual gross written premiums. In contrast to the traditional model where insurers profits depend on how much they pay in claims, Naked charges a fixed percentage of customers premiums. In years when claims are lower than expected, the surplus goes to communities and good causes chosen by customers, the statement said.Adamou Labara, IFC country manager for South Africa, speaking on the investment, said: 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. IFCs investment in Naked will help increase the penetration of tech-driven insurance in the country and contribute to job creation and economic growth.The funding round will accelerate the startups growth plans, including growing its team and expanding into new markets, according to CEO Thomson.