Naked, a South African insurtech startup that provides fully digital, AI-driven insurance products for homes, cars, and valuables, has raised $17 million in a series B funding round.

Naked's goal is to create a more accessible, convenient, and transparent insurance experience using AI and digital experiences, as well as its unique business model.

Unlike traditional insurers, Naked charges a fixed percentage of customers' premiums, rather than making profits based on claims. Any surplus is distributed to communities and worthy causes selected by customers.

Naked's AI-driven system offers customers an unprecedented level of convenience, allowing them to manage their entire insurance experience via an award-winning app without speaking to a contact centre agent.

This streamlined approach not only provides unmatched customer convenience but also helps Naked to save significant costs on automation, which can be passed on to customers in the form of lower premiums.

The investment round was led by the International Finance Corporation (IFC), the largest global development institution focusing on the private sector in emerging markets and a member of the World Bank Group. The German Development Finance Institution (DEG) and Naked's original investors, Yellowwoods and Hollard, also participated in the round.

In a statement shared with Techloy, the startup said the funding round is a significant endorsement of its management, technology, and positioning, as well as the company's potential to grow Africa's insurance market using digital technology.

The company's co-founder, Alex Thomson, said that the funds raised will be used to accelerate growth plans, expand into new markets, invest in technology, and grow the team.