On 16th February 2023 various sources announced that Africa-focused startup Smile identity had raised a $20 million Series B taking its total funding to about $30 million. In this article, we will do a brief breakdown of the startup that investors are increasingly backing.
Smile Identity is a technology company that provides digital identity verification services to businesses operating in Africa. The company's mission is to make it easier and more secure for individuals to access financial services, healthcare, education, and other online services by providing reliable and efficient identity verification solutions.
Smile Identity uses facial recognition and other biometric data to verify the identities of individuals remotely. This technology is particularly useful in regions where traditional forms of identity verification, such as government-issued IDs, are not readily available or reliable. By using biometric data, Smile Identity is able to accurately verify an individual's identity and ensure that they are who they claim to be.
One example of how Smile Identity works is in the context of mobile banking. In many parts of Africa, mobile banking has become a popular way for people to access financial services. However, one of the main barriers to entry is the requirement for identity verification. With Smile Identity, users can take a selfie and provide other biometric data, which is then verified by the company's technology. This process is quick and efficient, allowing users to access mobile banking services in a matter of minutes.
Smile Identity's customers are primarily businesses that require identity verification services for their customers. This includes financial institutions, healthcare providers, educational institutions, and online retailers. By using Smile Identity's services, these businesses are able to reduce fraud and ensure that their services are being accessed by legitimate individuals.
The founders of Smile Identity are Mark Straub and William Bares. The two met while studying at the University of Chicago Booth School of Business. They both shared a passion for using technology to solve social problems, particularly in developing countries. While working together on a project in Kenya, they realized the need for reliable digital identity verification solutions in Africa. This led to the founding of Smile Identity in 2017.
Since its founding, Smile Identity has received several awards and recognitions for its innovative technology and social impact. In 2020, the company was named the Best Identity Verification Solution at the African Fintech Awards. Smile Identity has also partnered with several notable organizations, including Mastercard and the World Bank, to expand access to digital services in Africa.
How big is the problem that Smile Identity is solving?
The problem that Smile Identity is solving is significant, particularly in Africa where reliable identity verification solutions are often lacking. According to the World Bank, over 1 billion people worldwide do not have a government-issued identification document. In Africa alone, it is estimated that around 500 million people lack a form of official identification. This lack of identification can be a significant barrier to accessing basic services, such as healthcare and education, and can also make it difficult for individuals to participate in the formal economy.
The problem is further compounded by the fact that traditional forms of identity verification, such as government-issued IDs, can be unreliable in many parts of Africa. For example, in Nigeria, it is estimated that up to 40% of government-issued IDs are fake or fraudulent. This makes it difficult for businesses to verify the identities of their customers, leading to increased fraud and lower levels of trust in online transactions.
Smile Identity's technology is helping to address this problem by providing a reliable and efficient way to verify an individual's identity remotely. According to the company's website, Smile Identity has verified over 700,000 identities since its founding in 2017. This number is significant, considering that many of these individuals may not have been able to access digital services without reliable identity verification solutions.
One example of how Smile Identity's technology is making a difference is in the context of mobile banking in Africa. According to a report by GSMA, mobile money accounts in Africa have grown by over 18% annually since 2014, reaching a total of 548 million accounts in 2020. However, one of the main barriers to entry for many individuals is the requirement for identity verification. With Smile Identity's technology, individuals can quickly and easily verify their identities, enabling them to access mobile banking services and participate in the formal economy.
In addition to mobile banking, Smile Identity's technology has applications in a wide range of industries, including healthcare, education, and e-commerce. For example, the company has partnered with the Kenyan Ministry of Health to provide identity verification for patients accessing telemedicine services. Smile Identity's technology is also being used by several e-commerce platforms in Africa to verify the identities of their customers and reduce fraud.
How much funding has Smile identity raised?
Smile Identity has raised a total of about $30 million in disclosed funding since its founding in 2017. The funding has come from a variety of sources, including venture capital firms, impact investors, and strategic partners. Here is a breakdown of the funding rounds that Smile Identity has completed:
- Seed Round: In 2018, Smile Identity raised $1 million in a seed round led by CRE Venture Capital. Other investors in the round included Khosla Ventures, LocalGlobe, Future Africa, and Beta Ventures.
- Series A: In 2020, Smile Identity raised $7 million in a series A round led by Costanoa Ventures. Other investors in the round included LocalGlobe, Intercept Ventures, and Future Africa.
- Strategic Partnerships: In addition to traditional funding rounds, Smile Identity has also secured funding through strategic partnerships. In 2019, Smile Identity partnered with Mastercard to receive funding through the Mastercard Start Path program. The program provides funding and support to early-stage startups in the fintech space. Smile Identity has also received funding through partnerships with the World Bank and the GSMA Ecosystem Accelerator Innovation Fund.
- Series B: In February 2023, Smile Identity announced a $20 million Series B funding round led by Costonoa and Norrsken22 with participation from Commerce Ventures, Courtside Ventures, Two Culture Capital, Valuestream Ventures, Intercept Ventures, Latitude, Future Africa, and 500 Fintech.
The funding raised by Smile Identity has been used to expand its team, invest in research and development, and expand its operations across Africa. The company has also used the funding to establish strategic partnerships with organizations in the fintech, healthcare, and e-commerce spaces, further expanding its reach and impact. Overall, the funding raised by Smile Identity has helped the company to grow and establish itself as a leading provider of digital identity verification solutions in Africa.
In conclusion, Smile Identity is a technology company that provides digital identity verification solutions for businesses operating in Africa. The company's technology is designed to address the unique challenges of identity verification in the region, where traditional forms of identification can be unreliable or nonexistent. Smile Identity has raised almost $30 million in funding from a variety of sources, including venture capital firms, impact investors, and strategic partners.
The funding has been used to expand the company's team, invest in research and development, and establish partnerships with organizations in the fintech, healthcare, and e-commerce spaces. Despite competition from other digital identity verification providers, Smile Identity has established itself as a leading player in the space, with partnerships with Mastercard, the World Bank, and other organizations. Overall, Smile Identity's technology has the potential to drive financial inclusion and economic growth in Africa by providing reliable and secure digital identity verification solutions to businesses and individuals.