Smile Identity, a business that uses Artificial Intelligence to provide ID verification and KYC compliance for African faces and identities, has raised $7 million in Series A funding. Smile Identity’s total capital now stands at over $11 million, making it the largest investment into an identity verification startup focusing on Africa.
The investment was co-led by Costanoa Ventures and the pan-African venture firm, CRE Venture Capital, along with participation from LocalGlobe, Intercept Ventures, Future Africa Ventures, and Angel Investors from across Africa and around the world. Existing investors, including Khosla Impact, ValueStream Ventures, Beta Ventures, 500 Startups, and Story Ventures also participated.
The new money will be used to strengthen the company’s services, expand into new areas, extend support for more ID kinds, and hire more engineers and support staff throughout Africa. John Cowgill of Costanoa will join Smile Identity’s board of directors in conjunction with this financing.
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“We believe anyone should be able to prove their identity easily, anywhere in the world and that access to a modern digital lifestyle should not depend on the origin of your ID Card or IP address,” said Mark Straub, Smile Identity’s Co-founder and CEO.
Why The Investors Invested
Investors invested in Smile Identity because of the traction the startup has acquired since launch. Every month, the company conducts over one million identity checks across Africa, and its software is utilized in banking, fintech, ride sharing, labor verification, government social assistance programs, and telecoms. Payments companies such as Paystack, Paga, and Chippercash; neo-banks such as Kudabank and Umba; traditional banks such as Stanbic IBTC; cryptocurrency exchanges such as Binance, Luno, and Paxful; and even supply-chain companies such as Twiga are among its customers.
Africans waste an abnormal amount of time attempting to confirm or verify their identities in order to acquire access to financial accounts, loans, SIM cards, address proofs, and social services; and an estimated 500 million Africans lack any kind of formal identity.
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“Smile Identity has powered our hyper growth across Africa, accelerating our ability to acquire real users and build a great KYC user experience for our customers. With Smile Identity, we were able to automate our compliance process and reduce KYC completion time by 99%, from 2 days to 2 minutes. Within 6 weeks of turning on Smile Identity’s automated KYC solution, we catapulted to #1 in the South African app store,” says Chippercash Co-founder and President Maijid Moujaled.
Costanoa Ventures, based in San Francisco, invests in tenacious and smart founders who are changing the way business is done. Costanoa wants to be a long-term partner for entrepreneurs that want to develop long-lasting businesses by using data to tackle challenging problems.
CRE Venture Capital works with and invests in innovative entrepreneurs in Africa who are creating category-defining technology companies. CRE was founded by Pule Taukobong and Pardon Makumbe to help creators establish African tech firms with global significance and impact by leveraging their ties and experience. Andela, Flutterwave, Rensource, Yoco, and Oradian are among the current investments.
A Look At What The Startup Does
Smile Identity was founded in 2017 with the goal of making it simple for Africans to confirm their identity online fast and easily, while also giving startups and established businesses with the tools and software they need to streamline customer onboarding, verify identities, and combat fraud. Smile Identity collaborates with local ID authorities to develop a platform that combines ID validation with patented face verification and liveness checks to allow non-surveillance, consent-based access, and financial inclusion for a new generation of African businesses.
With subsidiaries, branch offices and engineers in Nigeria, Kenya, South Africa, Ghana, Rwanda, Uganda and counting, Smile Identity’s growing team is made up of people from 12 countries, including 8 African nations.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer