Smile Identity, a startup that provides identity (ID) verification and Know-Your-Customer (KYC) compliance tools for African companies, on Thursday announced that it has raised a $7 million Series A round of funding.
The investment was jointly led by Costanoa Ventures and pan-African venture firm CRE Venture Capital with the participation of other investors. These include VCs like LocalGlobe, Intercept Ventures, Future Africa, unnamed angel investors, as well as existing investors such as Khosla Impact, ValueStream Ventures, Beta Ventures, 500 Startups, and Story Ventures.
With the new investment, Smile Identity plans to improve its services and expand across more markets. It will also add support for more ID types as well as hire more engineers and support staff across Africa. The investment also brings on John Cowgill, a partner at Costanoa, on the board of Smile Identity.
Smile Identity was founded by Mark Straub and William Bares in 2017. The company has since established operations in six African countries, which include Nigeria, Kenya, South Africa, Ghana, Rwanda, and Uganda.
The company’s software is currently used by companies in several sectors such as banking, fintech, ride-sharing, worker verification, and telecommunications. Smile Identity charges its customers on a per-query basis.
Its suite of about 80 clients includes payments companies like Paystack, Paga, and Chipper Cash; digital banks Kuda and Umba and traditional banks like Stanbic IBTC; cryptocurrency exchange platforms like Binance, Luno, and Paxful; and supply-chain businesses like Twiga Foods.
Speaking with TechCrunch, Straub said Smile Identity particularly helps fintechs spot good and potentially bad users who might hurt their businesses in the future.
“We are an accelerant of the growth of fintechs and shared economy companies because they know when they spend money on customers, those are real customers because they have actually done verification with us,” he said.
According to data on the company’s website, Smile Identity connects to over 15 different ID authorities and its ID validation covers over 250 million identities across Africa.
This funding brings total investments raised by Smile Identity to $11 million. It secured a $4 million seed round in 2019.
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