Identitypass, an identification verification API for Africa, raises $2.8M seed funding – •
Cell penetration in Africa is rising impressively at about 46% as extra individuals come on-line for the very first time. In flip, this has elevated the market alternative for startups, particularly fintechs and e-commerce, which attempt to present numerous options to fulfill the monetary wants of the populace.
However to try this, these companies should perform sure identification verifications and KYC to fight fraud, amongst different issues. Many platforms energy these KYC processes, and one among them, Identitypass, is immediately saying that it has raised $2.8 million in seed funding, months after graduating from Y Combinator. The spherical additionally comes a number of months after the startup raised $360,000 in pre-seed funding final November, bringing its whole funding to $3.1 million.
Experiences say African companies lose $4 billion yearly to cybercrime. The worldwide determine for this incidence stands at $1 trillion. Thus, the necessity for fintechs and digital companies in Africa to carry out stringent KYC and verification checks on their prospects.
Nonetheless, for the parents at Lagos-based Identitypass, it wasn’t the love for lowering the excessive charges of fraud that led them to start out the corporate. In accordance with co-founder and CEO Lanre Ogungbe, the workforce was initially constructing a platform that required customers to make use of biometrics (face, fingerprints, or voice) and playing cards to make funds. However whereas growing the platform, they encountered points performing verification checks. Therefore, the choice to pivot.
“On the level of after we’re constructing it [the payments solution], there was nobody available in the market that had the form of infrastructure that we wished to make use of. We wished to construct an alternative to authentication. That was it,” the CEO advised • in an interview.
The workforce reached out to fintechs asking how they remedy fraud and identification points, seeing rising demand from that phase. The overarching suggestions, Ogungbe stated, was a setup involving an in-house compliance workforce and enacting thresholds on transactions. Clients would wish to go additional investigative checks to make transactions above the edge for the latter.
In the meantime, a few of these fintechs didn’t exactly have wonderful KYC processes as a result of prospects solely needed to fill in only a few information factors at their onboarding phases. “We knew it could by no means work for us,” stated Ogungbe. “As we speak, we’ve got fundamental authentication utilizing OTPs or a four-pin password, however by beginning Identitypass, we wished to introduce extra authentication choices into the market.”
Subsequent, Identitypass approached numerous companies and authorities countrywide to get licenses and certifications wanted for authorizing checks throughout a full spectrum of verification factors. It launched with one information level in January 2020. However now, 200 lively companies throughout fintech, e-commerce, training, and mobility connect with 18 information factors to confirm their prospects’ identities on the platform. These companies are primarily based in Nigeria, the U.Ok., Kenya, the U.S. and India.
“The core of our enterprise is making it doable for digital companies in Africa to simply confirm and validate that their prospects are who they are saying they’re,” the chief government stated.
“Earlier than we got here into the market, somebody might choose one other individual’s BVN and use that to evaluate a mortgage facility,” stated the founder explaining why Identitypass takes numerous information factors into cognizance. “However with applied sciences like ours, we will do this type of verification to inform that the individual submitting the BVN, cellphone quantity or financial institution particulars isn’t the proprietor.”
Identitypass has processed greater than 1 million distinctive verifications since launch. These finish factors are government-approved IDs, reminiscent of nationwide IDs, driver licenses, worldwide passports, financial institution verification numbers (BVN), cellphone numbers, registration number plate numbers, debit playing cards, safety watchlists and tax historical past. Relying on the variety of finish factors a enterprise connects to, the identification and verification platform fees between 10 cents to twenty cents on each verification it executes.
Just lately, the two-year-old firm launched a SaaS platform along with its APIs. Ogungbe stated this new providing — software program somewhat than a plug-and-play resolution — offers Identitypass a bonus over similar gamers available in the market, reminiscent of fellow YC-batchmate Dojah and older startup Smile Identification.
“That makes us completely different from anybody available in the market as a result of immediately, we’re the one suppliers of each an API and a SaaS-based resolution for verification. So as to add, we’ve got extra information factors than most suppliers within the area. And the best way we use information and biometrics for verification, no different participant available in the market makes use of it that manner.”
This confidence in being a “market chief” is propelling the corporate into new territory: promoting to worldwide shoppers. On the decision, the CEO cited an occasion that transpired final month when U.S.-based Mercury restricted the accounts of some African startups attributable to compliance points. He stated Identitypass might stop such occasions sooner or later if it onboards firms of Mercury’s stature to conduct checks on people and companies from Africa.
“We won’t simply cease there,” Ogungbe stated. “We might additionally work with many regulatory companies to develop a top-notch information safety framework throughout Africa. Lastly, we’ll work with a number of alliances and kind extra formidable and strategic partnerships throughout completely different nations in Africa.”
Powered by this seed funding led by MaC Enterprise Capital, Identitypass plans to increase its current infrastructure, roll out new verticals round compliance, safety and information assortment, and push into new African nations. Y Combinator, Soma Capital, True Capital Fund and Sherwani Capital are amongst its different traders.