The importance of KYC and identity verification in a growing fintech environment like Africa cannot be overemphasized. With thousands of financial institutions serving millions of Africans, they need strict regulatory requirements to keep hackers and scammers at bay. As such, there is growing investor interest in startups that offer KYC and identity verification services.
smile identityan important player Offering face and identity ID verification and KYC compliance in Africa underscores this trend. In Series B funding, he received $20 million to advance expansion plans among other roadmap activities.
The startup announced a $7 million Series A investment in July 2021. Silicon Valley investor Costanoa Ventures, one of his co-leads on that round, co-led this recent Series B round with his Africa-focused venture capital firm Norrsken22. Her partner Lexi Novitske, general of Norrsken22, will join the company’s board of directors.
Participating investors include:Existing ones such as ValueStream Ventures, Intercept Ventures, Latitude, Future Africa, 500 Fintech and new backers such as Commerce Ventures, Courtside Ventures and Two Culture Capital.African The KYC onboarding and identity verification platform has received over $30 million from investors. It was launched in 2018 by Mark Straub and William Bares.
In a statement, Smile Identity will use the funding round to accelerate the development and adoption of its AI-powered identity verification technology, strengthen its recruitment efforts in East Africa, South Africa and West Africa with a focus on products and engineering, It said it would expand into new markets. Especially French-speaking and Arabic-speaking countries. The company hopes its war chest will enable it to work closely with identity authorities and governments to develop consumer consent standards and enforce local African data protection laws across the continent. .
Smile Identity helps clients mitigate fraud and onboard new customers more efficiently. Fraud rates on the African continent hit a record high of 28% last year, according to the company’s report, State of KYC in Africa. According to the report, the most common attacks are by fraudsters who provide her ID number that has been forged or stolen, or altered documents such as driver’s licenses, passports or national IDs. Or face mismatch, where facial biometrics do not match a valid ID. So how does Smile Identity help clients spot this scam? This includes identity verification, digital KYC, user onboarding, liveness checks, facial recognition, document verification, anti-fraud checks, etc. , a mix of different products, but the most important is identity data deduplication.
Mostly The fraud that Smile Identity notices occurs during the account opening or onboarding stage where many of our customers report many of the situations mentioned above on behalf of a large number of customers in the area of payments and money transfers. The deduplication product ensures that when end-her customers sign up on the client’s platform, they are required to take a selfie against their own girlfriend’s ID during onboarding. scam.
“If you don’t onboard your customers and check their biometrics, you could miss 50% of frauds. Biometric deduplication engine [our smart selfie]is our trademarked facial recognition technology and can be used during both the onboarding and deduplication and authentication stages,” Straub said by phone.
When we took a 6-year-old company 18 months ago, we had access to verification of over 250 million IDs and 15 different ID types across 6 African markets, performing over 1 million ID checks each month. was However, with the recent launch of the Document Verification product, Smile Identity was able to extend its capabilities. Now he can cover 1 billion IDs and verification processes around the world, the CEO said in an interview.
“An interesting update we have is Document Verification, which analyzes a photo of a document and compares it to user-provided selfies. With that product, we can cover all of Africa. Instead of covering 1 billion people, we are talking about over 230 ID types from over 100 countries, including all of Africa, the Diaspora, much of Europe and North America. ‘ said the Chief Executive Officer.
Another growth area is that Smile Identity has processed over 30 million identity verifications in 2021. This equates to more than half of the KYC checks the startup has recorded since its inception, about 50 million. The KYC verification startup, which has doubled its customer base since 2021 and now serves over 100 companies in banking, fintech, education, agriculture and e-commerce, also claims: I’m here. Perform 2-2.5 million identity checks monthly.
Smile Identity has also expanded its Business Verification (KYB) solution with 30 detailed business searches including registration number, legal entity, director, beneficiary and owner status. This product is currently available in Nigeria, Kenya and South Africa. Straub claims that Smile Identity has increased customers by more than 100% over the last year across all these products, and that he has tripled revenue within the same time frame.
A Series B funding injection means Smile Identity has more work to do. Smile Identity has a sort of trailblazer advantage with deep relationships and expertise that it launched years before other startups, but Straub said the company — nAfter recently opening offices in London and Cape Town, we are present in over 10 countries — “An incredibly diverse team and best-in-class technology” make it a market leader.
“We combine these two things and focus on delivering the best results for our customers,” he added. “Results will be measured by covering all his different types of identities and countries, pass rates, optimizing the user his journey and good compliance,” he added. “MAfrican countries are currently passing data protection regulations. When you operate in five or six markets, it’s hard to keep up with all of them, especially if you run digital financial products. By simplifying everything, building it into our software, and making it available to developers, we help you integrate your software and start onboarding your customers while protecting yourself from fraud and staying compliant from day one. ”
