Smile Identity, a KYC compliance and ID verification platform that helps fintech and businesses across Africa automate identity…
Smile Identity, a KYC compliance and ID verification platform that helps fintech and businesses across Africa automate identity verification has recently announced its acquisition of Inclusive Innovations, the parent company of Appruve, a Ghana-based identity verification startup.
By acquiring this company, Smile Identity aims to improve its identity verification services, making it simpler for companies operating throughout Africa to bring on new clients while guaranteeing that their identities are verified smoothly and securely.
Although the acquisition’s terms and conditions have not been made public, TechCrunch reports that the purchase amount was not more than $20 million, with a bigger portion being paid in stock
Speaking on this acquisition move, Smile Identity, in a statement seen by TechCrunch, said,
It is actively fulfilling regulatory requirements to finalize the transaction for the [Inclusive Innovation] affiliated entities in Africa…This strategic acquisition will expand Smile Identity’s footprint across Africa and solidify its position as the continent’s leading identity verification and digital KYC provider.
The KYC verification platform has already built a network of clients in the African fintech industry but with this acquisition comes a wide expansion ground for its services, particularly in West Africa, where Appruve has a strong presence.
The acquisition will also enable Smile Identity to integrate Appruve’s technology into its platform, making it even more robust and effective in detecting and preventing identity fraud.
Smile Identity hopes that the acquisition will help it expand its suite of APIs, which includes mobile money, data, and anti-fraud checks, allowing it to “cover over 1 billion Africans, the African diaspora, and 100 million African businesses, supporting over 230 documents and data types with integration options for every device and operating system combination in Africa.”
Read Also: Top cybersecurity predictions for African businesses in 2023, according to experts
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About Smile Identity
Founded in 2017 by Mark Straub and William Bares, Smile Identity started with a goal to provide identity verification services that are accessible, affordable, and secure to everyone, particularly those living in emerging markets. As a major player in Africa’s ID verification and KYC compliance industry, it has worked with popular clients including ChipperCash, Paga, PayStack, Opay, Kuda, etc.
The platform uses facial recognition technology, biometrics, and data integration to verify people’s identities, allowing businesses to onboard new customers in a matter of minutes. By leveraging machine learning algorithms, Smile Identity can detect and prevent identity fraud, making it an invaluable tool for businesses operating in high-risk environments.
Since its inception, Smile Identity has raised over $35 million in seed funding rounds, with its latest raise of $20 million in Series B, which was backed by investors such as Costanoa Ventures, Future Africa, and Norrsken22, among others,
About Aprruve
Appruve, on the other hand, was founded in 2018 to provide digital identity verification services to businesses in Ghana and across West Africa. The startup works with an API that allows businesses to verify the identities of their customers using data from multiple sources, including national ID cards, passports, and utility bills.
Speaking on the acquisition and the impact Appruve will have on Smile Identity’s services, Paul Damalie, the founder and CEO, said,
These are relevant localized data that have long been left out of the bigger pool of KYC and fraud prevention. It’s these capabilities, experience, and know-how that we are bringing on board, working together with Smile, which just launched an AML product, to build a fully comprehensive product and solution for the market.
Appruve has also developed a fraud detection system that uses machine learning algorithms to detect and prevent fraudulent activities. Since its inception, according to TechCrunch, the digital verification platform has received around $500,000 in venture capital funding and $450,000 in grant money from DFS Lab through the Bill & Melinda Gates Foundation, Google’s Launchpad studio accelerator, and others.)
The spike in internet scams and online fraudulent activities n Africa
We all know that in the heat of the pandemic season, the world shifted online, accelerating digitalization, which sort of made things a lot better but, at the same time, allowed cybercriminals to exploit and attack digital infrastructures and individuals’ online presence.
A report by The Guardian highlighted that “Interpol has described online scams such as banking and credit card fraud as the most prevalent and pressing cyber threat in Africa”, and a surge in attacks after the pandemic.
Also, Kaspersky‘s 2022 report disclosed that 8.7 per of its individuals and corporate users were affected by phishing attacks in 2022, 31.1 per cent of financial phishing attempts in Nigeria were through websites of fake payment systems, 51.2 per cent through fake online stores, and 17.8 per cent through fake online bank portals.
The world is shifting to digitalization. Although Africa is still lagging in the race, it has significantly grown in the number of individuals with an online presence and digitalized lifestyle. The acquisition comes when identity verification becomes increasingly important in Africa, particularly in the fintech sector.
The demand for safe and dependable identity verification services is growing as more African people access financial services via mobile money and other digital payment platforms. Despite an increase in the use of digital wallets, banking applications, and mobile money services across the continent, the combination of Smile Identity and its new subsidiary Appruve and the involvement of other KYC and AML services, hopes to tackle and reduce the possibility of fraud.