Naspers, through its investment vehicle, Naspers Foundry, has led a $11 million Series ‘A’, fund raising round in Naked; South Africa’s first fully digital insurance platform offering comprehensive and instant cover for cars, homes, contents, and standalone items. The funding round saw participation from existing Naked investors; Yellowwoods, and Hollard.
Since May 2020, Naspers Foundry has made five investments. The most recent investment being a $8.3 million as the lead investor in the Series A round, known to be Naspers Foundry’s biggest investment till date, and the third investment made in three months. To recall, in July 22 2021, South African insurtech startup Ctrl raised ZAR34 million (about $2.335 million) from Naspers Foundry.
Speaking on the raise, Alex Thomson, Co-founder of Naked said “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 break into international markets.”
According to McKinsey and Company’s recent report, economic growth across Africa is actively rebuilding the continent’s underdeveloped insurance market. The report places the continent as the second fastest-growing insurance market behind Latin America. Also, before the outbreak of the COVID-19 pandemic, Africa’s insurance market was expected to grow at 7% per annum from 2020 to 2025. While, the pandemic is envisaged to delay the growth pattern of the insurance market, it is envisaged to accelerate the shift toward digitalization.
Furthermore, the insurance market in Africa is fragmented, and plagued with inconsistent distribution among countries. For instance, 91% of insurance premiums are concentrated in only 10 countries, with the largest being South Africa which holds 70% of the market’s premiums. Besides South Africa, McKinsey identifies six “primary insurance regions in Africa” - Francophone Africa, Anglophone West Africa, southern Africa, North Africa, East Africa, Angola - and notably North Africa’s market share, constituting the second-largest.