smile identitya KYC compliance and identification verification partner for many African fintechs and companies, has acquired Inclusive Innovations, the parent company of approvea Ghanaian identity verification software developer.
In a statement shared with TechCrunch, Smile Identity said that it is “actively complying with regulatory requirements to complete the transaction for the [Inclusive Innovation] affiliated entities in Africa.” This strategic acquisition will expand Smile Identity’s footprint in Africa and cement its position as the continent’s leading digital KYC and identity verification provider, the statement read in part. While terms of the deal were not disclosed, sources close to the matter say the cash-and-stock deal was “no more than $20 million,” with a large portion in stock.
As fintech services proliferate in different African markets, the need for sufficient KYC and identity verification processes has intensified amid growing fraud challenges and stricter regulatory requirements.
Founded by brand straub and Guillermo Bares in 2017, Smile Identity is a major player in Africa’s identity verification and KYC compliance industry. Powered by a venture capital investment of more than $30 million (including a recently announced $20 million Series B) and backed by investors such as Costanoa Ventures, Future Africa, and Norrsken22, among others, the company has built its business by combining document verification, face verification, biometrics, and data integrations into local ID authorities. trusted to verify people’s identities. Other notable use cases include AML controls, customer onboarding, and fraud prevention.
On the other hand, Appruve, which provides an API that verifies user identity, fraud detection, and digital documentation, is primarily focused on new data sets that enable or complement traditional government data, such as international passports and national IDs. In the past 18 months, the four-year-old startup worked on global money network fraud data analysis, mobile money financial statement verification, and blocklist data from various banks and fintechs over the past 18 months. (The four-year-old digital verification upstart has received less than $500,000 in venture capital funding since its inception, as well as $450,000 in grants from DFS Lab. via Bill and Melinda Gates Foundationof Google launchpad studio acceleratorand others.)
“This is relevant localized data that has long been left out of the larger KYC and fraud prevention group. It is these skills, experience and insights that we are bringing to bear, working together with Smile, which has just released an AML product, to create a completely comprehensive product and solution for the market,” said the founder and CEO of Appruve. paul damalie about what your startup brings to the Smile Identity table.
This is how it fits into Smile Identity’s current growth strategy from a product standpoint but from a geographic standpoint. Document verification and facial recognition and matching comprise the core product of Smile Identity that works across Africa. While the platform has added depth in some markets with more advanced fintech regions, such as Nigeria, Kenya and South Africa, where it can query government databases, that depth is lacking in other markets, including French-speaking Africa. in a February interviewStraub noted that Smile Identity would use the growth capital it had raised to expand its KYC capabilities in the marketplace, among other things. So, in addition to providing Smile Identity with a skilled and experienced team, APIs and clients, Appruve presents the Costanoa-backed KYC identity provider with a gateway to the French-speaking market (focusing on Côte d’Ivoire and Senegal) and also to Uganda. Straub told TechCrunch. about a call.
“We already have product depth in Nigeria. We are interested in replicating product depth in more markets and realizing our ambitions to have product depth for all of Africa,” Straub said on the call. “Fraud data, mobile money data, government data queried against national ID systems, AML, PEP detection checks, sanctions detection, both global and local KYB business verification data. We want to add that depth in more markets, and Appruve provides some of that.”
Smile Identity, according to its statement, said that the acquisition of Appruve, which expands its set of APIs, including mobile money, data and anti-fraud controls, will allow it to “cover more than 1 billion Africans, the African diaspora and 100 million Africans”. African businesses, supporting over 230 documents and data types with integration options for every combination of device and operating system in Africa.” Prior to the acquisition, Smile Identity had just passed 60 million verifications. Meanwhile, Appruve processed up to 100,000 verifications a month, Damalie revealed in the interview.
Straub claims that the combination of Smile Identity and its new subsidiary Appruve along with the intervention of other KYC and AML services will help decrease the potential for fraud despite the increased use of digital wallets, banking apps and mobile money services across the continent. . It added that consumer data protection is paramount to Smile Identity’s business, and both Smile and Appruve “have been working diligently to achieve and maintain appropriate license regimes where required and various data protection policies.”
Accordingly, Damalie, who will now head Smile Identity’s international expansion efforts, he says, in a couple of years, the company sees itself acting as “the digital infrastructure that will enable trust among African businesses “as the intra-continental and intercontinental movement of goods and services across borders becomes more pronounced.”
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