Id verification firm Youverify extends seed funding to $2.5M because it expands throughout Africa – TechCrunch

This previous month has seen a number of African fintechs comparable to Flutterwave and Union54 make headlines for compliance checks and fraud points. Each unlinked occasions re-emphasize the significance of know your buyer (KYC) and anti-money laundering (AML) checks and why regulators implement strict insurance policies that monetary establishments should be held accountable to whereas working throughout the continent and globally.

For the various startups whose providers assist preserve the operations of monetary establishments comparable to banks and fintechs in verify, this era highlights their relevance greater than ever. Within the newest improvement, Youverify, a Lagos and San Francisco–based mostly identification verification firm serving to African banks and startups automate KYC and different compliance procedures, is asserting that it has secured a $1 million seed spherical extension. The startup raised a $1.5 million spherical in 2020, bringing its complete seed increase to $2.5 million. 

Africa-focused VCs Orange Digital Ventures (ODV) and LoftyInc Capital, the 2 traders who co-led its preliminary seed spherical, additionally led the extension. Extra funding got here from Octerra Capital, Plug & Play Enterprise, Syntax Ventures, HTTP Traders, Afer Group and Fronesyz Capital. 

The proliferation of monetary providers in Africa is starting to draw extra scrutiny from regulators. In accordance with stories, transactions value $116 billion shall be made by way of digital cost channels this yr, requiring stringent measures to forestall identification theft and fraud. Subsequently, the rise in give attention to sustaining transparency in monetary laws and bettering methods for KYC and AML by implementing regulatory applied sciences has change into a major development issue for the market. And as regtech demand globally will increase, so will Africa’s, with stories saying it’s going to attain about $1.2 billion within the subsequent 5 years.

Youverify got here into Africa’s regtech scene when founder and CEO Gbenga Odegbami based the corporate in 2018. Launched within the Nigerian market, Youverify first offered API for tackle and identification verification to a number of monetary establishments. Now it has added extra KYC merchandise and expanded into new markets comparable to Ghana, Côte d’Ivoire, South Africa, Kenya and Uganda. 

“The way in which our clients see us is that we assist them automate their KYC and compliance points,” mentioned Odegbami on a name with TechCrunch. 

Along with verifying identities past Nigeria’s financial institution verification quantity (BVN) and addresses, Odegbami says Youverify layers KYC and compliance merchandise comparable to transaction monitoring. He additional defined that these choices cater to points some fintech platforms have confronted just lately: alleged AML points within the case of Flutterwave in Kenya and Ping Categorical within the U.S. and fraud within the case of Union54’s chargebacks. Within the latter, Youverify claims it might’ve prevented large-scale chargeback fraud by figuring out the sample of transactions to flag fraud, blocking the digital playing cards and tying them again to fraudsters committing the a number of faux chargebacks. 

“They [Union54] grew sooner than they might put in place the right transaction monitoring and fraud detection programs that may establish transactions occurring from their clients,” the CEO mentioned of the chargeback state of affairs Union54 has handled over the previous couple of months. “A system like ours will be capable to establish earlier and new patterns in such a approach that we might’ve been in a position to assist such the corporate.”

It wasn’t till final yr that Youverify began coping with fintechs. Initially, most of its clients have been governmental our bodies, massive companies like Bolt and banks. Practically two-thirds of Nigeria’s industrial banks, comparable to Commonplace Chartered, Commonplace Financial institution and Constancy Financial institution, use the platform’s identification verification and KYC merchandise, Youverify mentioned.

Nonetheless, in a bid to serve extra purchasers, the corporate launched its proprietary know-how, the Youverify OS (YVOS), which gives a single platform for automating due diligence and combines threat and compliance administration with its core identification verification platform to ship these fintechs an enterprise-grade compliance answer. With its different product, vFORM, a low and no-code software, companies can create a customized course of for onboarding new clients utilizing a drag-and-drop builder. 

Because of diversifying its clientele and demand for its KYC merchandise, Odegbami mentioned Youverify’s buyer base elevated by 300% to serve greater than 400 banks and high-growth startups. Within the final 24 months, Youverify’s software processes have grown by greater than 1,000% to greater than 5 million functions which have helped its purchasers rent expertise, promote monetary merchandise, and remotely onboard ride-hailing drivers. The corporate’s YouID digital identification platform added greater than 500,000 customers, with 600 service suppliers on its market waitlist throughout the continent. Odegbami mentioned the Lagos-based identification verification firm crossed an ARR of over $1 million final yr.

Youverify isn’t the one identification verification firm in Africa. Comparable suppliers embrace Smile Id and YC-backed firms IdentityPass and Dojah. With out mincing phrases, Odegbami mentioned his firm is a “market chief” as a result of it got here into the market a lot earlier and possesses extra expertise, and gives extra information units than the others.

Over the following 18 months, Youverify plans to develop its footprint to cowl 30 nations, particularly within the southern, japanese and francophone components of Africa, the place Odegbami says the corporate shall be recruiting aggressively. It additionally intends to extend the variety of IDs it may possibly confirm, from 400 million to 2 billion, and develop new automated compliance merchandise for the gaming, journey, healthcare and telecommunications industries.