Smile Identity, a KYC compliance and ID verification partner for many African fintechs and businesses, has acquired Inclusive Innovations, the parent company of Appruve, a Ghanaian developer of identity verification software.
In a statement shared with TechCrunch, Smile Identity 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, a part of the statement read. While the terms of the deal were not disclosed, sources close to the matter say the cash-and-stock deal was “not more than $20 million,” with a large chunk as stock.
As fintech services proliferate across different African markets, the need to have sufficient KYC and identity verification processes in place has intensified amid increasing fraud challenges and more stringent regulatory requirements.
Founded by Mark Straub and William Bares in 2017, Smile Identity is a major player in Africa’s ID verification and KYC compliance industry. Buoyed by 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 trusted ID authorities to verify people’s identities. Other prominent use cases include AML checks, customer onboarding and fraud prevention.
On the other hand, Appruve, which provides an API that verifies user identity, fraud detection and digital documentation, primarily focuses on new datasets that enable or complement traditional government data such as international passports and national IDs. Within the last 18 months, the four-year-old startup worked on analyzing fraud data from global money networks, verification of mobile money financial statements and blocklist data from various banks and fintechs within the last 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 grant money from DFS Lab through the Bill & Melinda Gates Foundation, Google’s launchpad studio accelerator, and others.)
“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,” said Appruve founder and CEO Paul Damalie on what his startup brings to Smile Identity’s table.