Nigeria’s Youverify raises $2.5M to enhance anti-money laundering compliance

Youverify, a Nigerian provider of identity verification and anti-money laundering (AML) solutions for banks and startups, secured a $2.5 million investment from Elm, which specializes in offering ready-made and customized digital solutions to public and private institutions in Saudi Arabia.

The pre-Series A investment from Elm also includes a strategic partnership to help Youverify streamline AML compliance for businesses, bolster global risk intelligence, and expand its products into new markets.

Since 2022, Youverify has expanded its real-time business verification coverage to 145 jurisdictions across 48 countries. Additionally, the platform offers coverage for real-time individual verification, including credit history and national identity numbers, in 46 countries, according to founder and CEO Gbenga Odegbami who launched the startup in 2018. The chief executive mentioned on a call with TechCrunch that Youverify exceeded its initial objective set during its seed extension round in 2022, which was to expand coverage across 30 African countries.

Despite this, the company currently serves commercial customers in only 12 countries. Across these countries, Youverify processes 4 million monthly applications for over 3,500 businesses with 800 active clients. This marks a significant increase from the 400 businesses and 5 million application processes per year recorded in 2022. Additionally, the platform’s capacity to verify IDs has expanded from 400 million to 5 billion people — as well as 600 million businesses across various industries such as gaming, travel, healthcare, and telecommunications.

“Individuals and businesses can verify their identity, registration status and ownership using their government data through Youverify. This is not the generic OCR-based KYC, which uses image recognition to validate the ID presented to it. In addition, we launched our anti-money laundering and risk classification product to address some of these industries,” the CEO noted.

“For example, our risk classification determines the AML and financial risk exposure that clients pose to our customers. We utilize a variety of reliable data sources, including government sanctions and watchlists, global news outlets’ sentiment data, country-risk models and commercially accessible data, to make informed decisions on AML-related risks.”

He elaborates that Youverify’s approach entails utilizing established mathematical models and AI algorithms to assess and analyze risks. Subsequently, the platform generates regulatory reports for submission to regulators across multiple countries. Other providers in the same space include Smile Identity, Dojah, and Identitypass.

The surge in financial services across Africa has drawn increased attention from regulators. Reports indicate that transactions totaling $116 billion will occur through digital payment channels this year, necessitating stringent measures to combat identity theft and fraud. Accordingly, there’s a growing emphasis on transparency in financial regulations and the enhancement of strategies for AML and Know Your Customer (KYC) through the adoption of regulatory technologies (regtech). Africa expects to follow suit as the demand for regtech solutions rises globally.

Odegbami stresses that collaborating with regulators across various markets has honed Youverify’s proficiency in compliance and cultural sensitivity. This expertise enables the company to customize its solutions to suit diverse enterprise requirements. Such experiences underscore the increasing global importance of the governance, risk management, and compliance (GRC) market, which currently surpasses $57 billion annually.

“We are excited to partner with Youverify, a company that shares our vision for leveraging technology to solve critical challenges faced by businesses today,” said Fahad bin Issa Ibrahim Al-Shathry, VP of Elm Investment. “This collaboration is a testament to our dedication to collaborating with exceptional founders through investing in a budding technology ecosystem not only in the Kingdom of Saudi Arabia but also globally to drive efficiency, security, and trust.”