identity verification API Africa
Mobile penetration in Africa is growing impressively at about 46% as more people come online for the very first time. In turn, this has increased the market opportunity for startups, especially fintechs and e-commerce, which try to provide various solutions to meet the financial needs of the populace.
But to do that, these businesses must carry out certain identity verifications and KYC to combat fraud, among other things. Many platforms power these KYC processes, and one of them, Identitypass, is today announcing that it has raised $2.8 million in seed funding, months after graduating from Y Combinator. The round also comes a few months after the startup raised $360,000 in pre-seed investment last November, bringing its total funding to $3.1 million.
Reports say African businesses lose $4 billion annually to cybercrime. The global figure for this occurrence stands at $1 trillion. Thus, the need for fintechs and digital businesses in Africa to perform stringent KYC and verification checks on their customers.
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However, for the folks at Lagos-based Identitypass, it wasn’t the love for reducing the high rates of fraud that led them to start the company. According to co-founder and CEO Lanre Ogungbe, the team was initially building a platform that required consumers to use biometrics (face, fingerprints or voice) and cards to make payments. But while developing the platform, they encountered issues performing verification checks. Hence, the decision to pivot.
The team reached out to fintechs asking how they solve fraud and identity issues, seeing growing demand from that segment. The overarching feedback, Ogungbe said, was a setup involving an in-house compliance team and enacting thresholds on transactions. Customers would need to pass further investigative checks to make transactions above the threshold for the latter.
Meanwhile, some of these fintechs did not precisely have excellent KYC processes because customers only had to fill in very few data points at their onboarding stages. “We knew it would never work for us,” said Ogungbe, who founded the company with Niyi Adegboye, Ebuka Obi, and Tolu Adetuyi last year. “Today, we have basic authentication using OTPs or a four-pin password, but by starting Identitypass, we wanted to introduce more authentication options into the market.
Next, Identitypass approached various agencies and authorities countrywide to get licenses and certifications needed for authorizing checks across a full spectrum of verification points. It launched with one data point in January 2020. But now, 200 active businesses across fintech, e-commerce, education, and mobility connect to 18 data points to verify their customers’ identities on the platform. These businesses are based in Nigeria, the U.K., Kenya the U.S., and India.
identity verification API Africa
