Several African fintechs have made headlines for compliance checks and fraud issues. Regulators enforce strict policies that financial institutions need to be held accountable to while operating across the globe.
This time of year highlights the relevancy of the services that help keep the operations of financial institutions in check. Youverify, a Lagos and San Francisco–based identity verification company that helps African banks automate KYC and other compliance procedures, has secured a $1 million seed round extension. The startup raised over a million dollars in the year 2020.
The two investors who co-led its initial seed round were part of the extension. Octerra Capital, Plug & Play Venture, Syntax Venture, Afer Group, and Fronesyz Capital invested additional money.
Regulators are starting to pay more attention to the financial services in Africa. Transactions worth $116 billion will be made through digital payment channels this year in order to prevent identity theft and fraud. The rise in focus on maintaining transparency in financial regulations has become a significant growth factor for the market. According to reports, Africa will reach about $1.2 billion in the next five years due to increased regtech demand.
The founder and CEO of Youverify is from Africa. Youverify was launched in the Nigerian market. It has expanded into new markets such as Uganda and Cte d'Ivoire.
Odegbami said on the call that they help their customers automate their KYC and compliance issues.
Youverify is able to verify identities beyond Nigeria's bank verification number and addresses. He explained that the offerings cater to the issues that have been faced by some of the platforms. Youverify says it could have prevented large-scale chargeback fraud by identifying the pattern of transactions to flag fraud, blocking the virtual cards and tying them back to fraudsters.
The CEO of Union54 said that the company grew faster than they could put in place proper transaction monitoring and fraud detection systems. A system like ours will be able to identify previous and new patterns and help such a company.
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Last year, Youverify began dealing with fintechs. Most of its customers were governmental bodies. More than two-thirds of Nigeria's commercial banks use the platform's identity verification and KYC products.
In order to serve more clients, the company launched its proprietary technology, Youverify OS, which combines risk and compliance management with its core identity verification platform to deliver an enterprise-grade compliance solution. Businesses can use vFORM, a low and no-code tool, to create custom processes for new customers.
Youverify's customer base increased by 300% due to the fact that it diversified its clientele and demand for its KYC products Over the last 24 months, Youverify's application processes have grown by more than 1,000% to more than 5 million applications that have helped its clients hire talent, sell financial products, and remotely onboard ride-sharing drivers. More than half a million people have used the company's YouID digital identity platform. Last year, the identity verification company crossed an ARR of over $1 million.
There are other identity verification companies in Africa. YC-backed companies IdentityPass and Dojah are similar. Odegbami said his company is a market leader because it came into the market much earlier and has more experience than the other companies.
In the southern, eastern and francophone parts of Africa, Youverify will be recruiting aggressively over the next 18 months. It wants to increase the number of IDs it can verify from 400 million to 2 billion and develop new automated compliance products.
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