Smile Identification expands African footprint with acquisition of Appruve to strengthen ID verification providers

Smile Identification, a KYC compliance and ID verification associate for a lot of African fintechs and companies, has acquired Inclusive Improvements, the guardian firm of Appruve, a Ghanaian developer of identification verification software program.

In an announcement shared with TechCrunch, Smile Identification mentioned it’s “actively fulfilling regulatory necessities to finalize the transaction for the [Inclusive Innovation] affiliated entities in Africa.” This strategic acquisition will develop Smile Identification’s footprint throughout Africa and solidify its place because the continent’s main identification verification and digital KYC supplier, part of the assertion learn. Whereas the phrases of the deal weren’t disclosed, sources near the matter say the cash-and-stock deal was “no more than $20 million,” with a big chunk as inventory.

As fintech providers proliferate throughout totally different African markets, the necessity to have adequate KYC and identification verification processes in place has intensified amid rising fraud challenges and extra stringent regulatory necessities.

Based by Mark Straub and William Bares in 2017, Smile Identification is a significant participant in Africa’s ID verification and KYC compliance business. Buoyed by enterprise capital funding of greater than $30 million (together with a just lately introduced $20 million Collection B) and backed by traders reminiscent of Costanoa Ventures, Future Africa and Norrsken22, amongst others, the corporate has constructed its enterprise by combining doc verification, face verification, biometrics, and knowledge integrations into native trusted ID authorities to confirm individuals’s identities. Different outstanding use instances embody AML checks, buyer onboarding and fraud prevention.

Then again, Appruve, which supplies an API that verifies consumer identification, fraud detection and digital documentation, primarily focuses on new datasets that allow or complement conventional authorities knowledge reminiscent of worldwide passports and nationwide IDs. Throughout the final 18 months, the four-year-old startup labored on analyzing fraud knowledge from international cash networks, verification of cell cash monetary statements and blocklist knowledge from numerous banks and fintechs inside the final 18 months. (The four-year-old digital verification upstart has obtained lower than $500,000 in enterprise capital funding since its inception in addition to $450,000 in grant cash from DFS Lab by the Invoice & Melinda Gates Basis, Google’s launchpad studio accelerator, and others.)

“These are related localized knowledge which have lengthy been overlooked of the larger pool of KYC and fraud prevention. It’s these capabilities, expertise, and know-how that we’re bringing on board, working along with Smile, which simply launched an AML product, to construct a completely complete product and answer for the market,” mentioned Appruve founder and CEO Paul Damalie on what his startup brings to Smile Identification’s desk.

Right here’s additionally the way it matches into Smile Identification’s present progress technique from a product however geographic-led standpoint. Doc verification and face recognition and matching comprise Smile Identification’s base-level product that works throughout Africa. Whereas the platform has added depth in some markets with extra superior fintech areas, reminiscent of Nigeria, Kenya and South Africa, the place it could possibly question in opposition to authorities databases, such depth is missing in different markets, together with Francophone Africa. In a February interview, Straub famous that Smile Identification would use the expansion capital it had secured to develop its KYC capabilities into the market, amongst different issues. Thus, along with supplying Smile Identification with a talented and skilled staff, APIs and clients, Appruve presents the Costanoa-backed KYC identification supplier with a gateway into the Francophone market (specializing in Ivory Coast and Senegal) and in addition Uganda, Straub informed TechCrunch over a name.

“We have now product depth in Nigeria already. We’re concerned with replicating the product depth to extra markets and realizing our ambitions to have product depth for all of Africa,” Straub mentioned on the decision. “Fraud knowledge, cell cash knowledge, authorities knowledge queried in opposition to nationwide ID methods, AML, PEP screening checks, sanction screening, each international and native KYB enterprise verification knowledge. We need to add that depth in additional markets, and Appruve provides a few of that.”

Smile Identification, based on its assertion, mentioned the Appruve acquisition — which expands its suite of APIs, together with cell cash, knowledge, and anti-fraud checks — will enable it to “cowl over 1 billion Africans, the African diaspora, and 100 million African companies, supporting over 230 paperwork and knowledge varieties with integration choices for each machine and working system mixture in Africa.” Earlier than the acquisition, Smile Identification had simply crossed over 60 million verifications. In the meantime, Appruve processed as much as 100,000 verifications month-to-month, Damalie disclosed within the interview.

Straub asserts that the mix of Smile Identification and its new subsidiary Appruve alongside the intervention of different KYC and AML providers, will assist lower the potential for fraud regardless of elevated utilization of digital wallets, banking apps, and cell cash providers throughout the continent. He added that defending shoppers’ knowledge is paramount to Smile Identification’s enterprise, and each Smile and Appruve “have been working diligently to attain and preserve the suitable licensing regimes the place required and numerous knowledge safety insurance policies.” According to that, Damalie, who will now head worldwide enlargement efforts for Smile Identification, says, in a few years, the corporate sees itself performing as “the digital infrastructure that may allow belief amongst African companies” because the intra- and inter-continental motion of products and providers throughout borders turn into extra pronounced.”