Naspers, through its early-stage tech investment vehicle Naspers Foundry, announced a R120 million (US$8.3m) investment in Naked, the AI-driven insurtech company.

According to a statement released to the media, the transaction is Naspers Foundry’s second insurtech investment in two weeks and its biggest investment to date.

It is also part of Naspers’s R1.4-billion commitment and intention to grow South Africa’s early-stage tech ecosystem through Naspers Foundry.

Co-founded by actuaries Alex Thomson, Sumarie Greybe, and Ernest North, Naked uses AI and automation to create a new type of insurance experience.

The business model aims to restore trust in how insurance works.

According to the company, consumers can get a final insurance quote on household and/ or vehicle insurance in less than 90 seconds, and switch or pause their cover, all online, without speaking to a contact centre agent.

Phuthi Mahanyele-Dabengwa, South Africa CEO of Naspers.

Phuthi Mahanyele-Dabengwa, South Africa CEO of Naspers, said: “South Africans are in general underinsured when it comes to short-term personal insurance. While this is often due to price, consumer distrust and complexity have led to a misunderstanding of insurance. Naked’s offering is convenient, transparent and passes the cost savings from its innovative technology on to customers. It improves financial inclusion, in line with Naspers Foundry’s objective of investing in technology businesses that have a positive impact on society.”

Fabian Whate, Head of Naspers Foundry.

Fabian Whate, Head of Naspers Foundry, said: “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.”

Alex Thomson, Co-founder of Naked.

Alex Thomson, Co-founder of Naked, commented: “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, including enabling customers to buy cover online in seconds, allowing them to claim and manage cover on our award-winning app, and passing on huge savings through sustainably lower premiums.”

“But this is just the start of our journey to reinvent insurance. We are excited to have an investor of Naspers Foundry’s calibre onboard 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.”

Existing Naked investors, Yellowwoods and Hollard, also participated in the funding round.

In July Naspers announced a R34-million investment in SA digital insurance advice platform Ctrl.

Naspers was quoted at the time as saying: “The platform enables brokers to provide insurance advice digitally and allows underserved consumers to easily compare multiple quotes, obtain advice, accept cover and manage their policies.

“Ctrl offers consumer-facing businesses an opportunity to enter the insurance advice industry by providing insurance solutions to their existing clients, enabling them to generate an additional income stream. The result is a service that gives consumers more convenience and more control over their own insurance needs and provides insurance advisors with a more effective way to service their clients, freeing up time to focus on their customers’ needs.”