ZAR30 million (US$2.2 million) has been raised by South African insurtech startup Naked Insurance in follow-on funding from existing investors Yellowwoods and Hollard to expand its operations and launch new products.
Naked, an artificial intelligence (AI)-driven car insurance provider, launched to market in South Africa in April after initially raising funding from Hollard, South Africa’s largest privately-owned insurance group, and private investment firm Yellowwoods in October 2017.
After the startup successfully met key milestones, the two firms have now invested a further ZAR30 million (US$2.2 million) in Naked to enable the company to accelerate its growth and expand into new product lines.
“We are proud to receive this vote in confidence from our investors and look forward to rolling out new products in response to customer demand,” said Naked co-founder Alex Thomson.
The startup now plans to grow its team, ramp up customer acquisitions and expand into new short-term insurance product categories following a strong first six months of trading, with customer acquisition and retention rates exceeding the company’s expectations.
“We’re delighted by the response our insurance offering has received from the market. Our proposition of putting the customer in control, value for money and customer fairness is resonating with connected customers who are looking for a better car insurance experience,” said Thomson.
Naked uses AI and automation to lower costs, put customers in control of their insurance experience, reduce fraud and enhance insurance as a social good. Customers can go online and get a final car insurance quote in less than 90 seconds, without speaking to a contact centre agent.
“We are proud investors in Naked because we embrace innovation that delivers an improved customer experience and enhances fairness for policyholders. Its strong performance over the past six months validates its business model, giving us confidence in its ability to drive further growth and innovation in the months to come,” said Nic Kohler, head of insurance at Yellowwoods.