Identitypass graduated from Y Combinator a few months ago and has secured $2.8 million in seed funding.
Last November, the tech company made $360,000 in pre-seed funding, bringing the total funding to $3.1 million.
They didn’t start the company because they were passionate about lowering fraud rates. According to Lanre Ogungbe, co-founder and CEO, the team was initially developing a platform that needed customers to make payments using biometrics (face, fingerprints, or voice) and cards.
However, they ran into problems performing verification checks while developing the platform. As a result, the pivot was made.
After seeing a rise in demand for fraud and identity issues, the team reached out to fintech to inquire about their solutions.
The overarching feedback, according to Ogungbe, was a setup encompassing an in-house compliance team and the implementation of transaction thresholds.
To make transactions above the threshold for the latter, consumers would have to pass additional investigative checks.
Meanwhile, according to Ogungbe, who started the company with Niyi Adegboye and Ebuka Obi last year, some of this fintech did not have outstanding KYC procedures because customers only had to fill in a few data points during their onboarding stages.
The startup currently uses OTPs or a four-pin password for basic authentication, but the company wanted to expand its authentication options by launching Identitypass.
Following that, Identitypass approached various institutions and authorities across the country to obtain the licenses and certifications required to authorize checks at a wide range of verification points. In January 2020, it began with just one data point.
However, 200 active businesses in fintech, e-commerce, education, and mobility now link to 18 data points on the platform to verify their customers’ identities. These companies are based in Nigeria, the United Kingdom, Kenya, the United States, and India.
Identitypass intends to increase its current facilities, roll out new verticals around compliance, security, and data collection, expand into new African countries and add to its 14-person team thanks to this seed funding led by MaC Venture Capital. Other investors include Y Combinator, Soma Capital, True Capital Fund, and Sherwani Capital.
The identity and verification platform costs between 10 cents and 20 cents per verification, based on the number of endpoints a company links to.
In addition to its APIs, the two-year-old startup recently established a SaaS platform. Identitypass, according to Ogungbe, has an edge over similar competitors in the field, such as fellow YC-batchmate Dojah and older startup Smile Identity, by providing software rather than a plug-and-play solution.
Techbuild’s Take
KYC (Know Your Customer) is now an important part of the battle against fraudulent activity and money laundering, and client identification is the most important aspect because it is the first step toward better performance in the subsequent stages.
As more people gain access to the internet for the first time, mobile penetration in Africa is rising to around 46%. As a result, the market potential for startups, particularly fintechs and e-commerce, has expanded, as they try to offer numerous approaches to satisfy the financial requirement of the general public.
However, in order to do so, these enterprises must perform identity verifications and KYC in order to tackle fraud, among other things. Many platforms strengthen these KYC procedures, and Identitypass is one of them.
Since its inception, Identitypass has completed over 1 million unique verifications. National IDs, driver licenses, international passports, bank verification numbers (BVN), phone numbers, vehicle plate numbers, debit cards, security watchlists, and tax history are examples of government-approved IDs.
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