The digital economy is rapidly expanding in Africa, with nearly 600 million internet users already and a target from the African Union of universal digital access by 2030.
This presents a tremendous opportunity for the growth of internet-powered digital and financial services but brings the challenge of preventing bad actors from infiltrating systems and putting user data and money at risk. To meet these challenges, businesses and organisations must onboard customers quickly and securely while maintaining compliance across complex and changing regulatory requirements.
Across Africa, tech entrepreneurs are building solutions that will enable businesses to fulfil their KYC mandate in other to prevent fraudulent activities. Smile Identity is one of these solutions, the company provides ID verification and KYC compliance for African faces and identities using machine learning algorithms.
To expand its offering across the continent, the company which was founded in 2017 by Mark Straub and William Bares has secured $20 million in a Series B round led by Costanoa and Norrsken22, with participation from Commerce Ventures, Courtside Ventures, Two Culture Capital, Valuestream Ventures, Intercept Ventures, Latitude, Future Africa, and 500 Fintech.
This brings Smile Identity's total funding to $31 million, including $7 million raised in their Series A funding round in 2021. As part of the latest investment, Norrsken22's General Partner, Lexi Novitske will join the company's board.
"Smile Identity is leading the way in Africa's digital transformation, providing secure and verifiable identities for millions. Under the leadership of CEO Mark Straub, a top-notch team, and an on-the-ground presence across the continent, Smile is positioned to capture a significant share of Africa's growing $1.5 billion identity and KYC market opportunity. By empowering the continent with a foundation for safe transactions, Smile is driving financial service adoption and shaping the digital economy's future," Lexi Novitske, said in a statement shared with Benjamindada.com.
Since its Series A funding round, Smile Identity has completed 50 million KYC checks for hundreds of partners across the African continent, helping them to scale their businesses by mitigating fraud and onboarding new customers seamlessly.
The company also offers global coverage with its Document Verification product and has added a Business Verification or "Know-Your-Business" (KYB) solution to its offerings. In addition, Smile Identity has expanded into South Africa and Uganda and opened offices in London and Cape Town, according to the statement.
"We believe the majority of people are honest, the challenge in the digital age is to prove this, regardless of how a user onboards – whether via agents, apps, tablets, the web, blockchains or paper forms," Mark Straub, CEO and co-founder of Smile Identity, stated. "We are thrilled to have the support of our partners and investors as we solve this problem across IDs, devices and compliance regimes to ensure Africans are among the most trusted consumers in the world."
Smile Identity will use the funding from its Series B round to expand its product and engineering team, accelerating the development and specialisation of its AI-powered biometrics, document verification, anti-fraud and compliance solutions tailored for African markets.
The company is growing its existing teams in East, West, and Southern Africa and completing its pan-African reach with plans to enter Francophone and Arab-speaking markets through localised sales and support. In addition, the company will continue working closely with regulators and ID authorities to build consumer consent standards into software, enforce African data protection laws, and share data on fraud and financial inclusion trends.