In recent weeks, several African fintech firms have faced scrutiny over compliance issues and fraud allegations, highlighting the critical need for robust Know Your Customer (KYC) and Anti-Money Laundering (AML) practices. These developments underscore the importance of technologies that enable financial institutions to meet stringent regulatory requirements. One company addressing this need is Youverify, a Lagos and San Francisco-based regtech startup. The company has announced an additional $1 million in seed funding, extending its 2020 raise of $1.5 million to a total of $2.5 million.
This latest funding round was co-led by Orange Ventures and LoftyInc Capital, with additional backing from Octerra Capital, Plug & Play Venture, Syntax Ventures, HTTP Investors, Afer Group, and Fronesyz Capital.
The Rise of Regtech in Africa
As Africa’s financial services sector grows, so does the demand for compliance-focused technology. With digital payment transactions in Africa projected to exceed $116 billion this year, addressing risks such as fraud and identity theft is critical. Globally, the regtech market is expected to grow significantly, with Africa’s share predicted to hit $1.2 billion by 2028.Launched in 2018, Youverify initially focused on providing APIs for identity and address verification in Nigeria. Over time, the company has broadened its offerings to include additional KYC products and expanded into markets such as Ghana, Côte d’Ivoire, South Africa, Kenya, and Uganda.
“Our mission is to simplify compliance and help financial institutions automate their KYC processes,” said founder and CEO Gbenga Odegbami.
Tackling Industry Challenges
Youverify’s solutions address key challenges faced by financial institutions. For instance, its AI-powered platform offers advanced transaction monitoring to identify patterns that may indicate fraud or money laundering. This functionality could have mitigated issues like the recent chargeback frauds encountered by certain fintech platforms, according to Odegbami.
Beyond financial institutions, Youverify also supports ride-hailing companies, governments, and large corporations in conducting background checks and verifying identities. The company claims that two-thirds of Nigeria’s commercial banks currently use its services, with clients including major names like Standard Bank and Fidelity Bank.
Innovations Driving Growth
To cater to diverse industries, Youverify developed its operating system, YVOS, which integrates identity verification, risk management, and compliance tools into one platform. The company also introduced vFORM, a low-code/no-code tool that allows businesses to customize onboarding processes without extensive technical expertise.
Over the last two years, Youverify has processed over 5 million applications, helping its clients streamline hiring, customer onboarding, and transaction monitoring. Its digital identity platform, YouID, has added more than 500,000 users, with 600 service providers awaiting onboarding.
Plans for Expansion
Positioning itself as a leader in Africa’s regtech space, Youverify is eyeing further expansion. The company aims to operate in 30 countries within the next 18 months, particularly in southern, eastern, and francophone Africa. It plans to increase its verification database from 400 million to 2 billion IDs and extend its offerings to sectors such as gaming, travel, healthcare, and telecommunications.
With its innovative solutions and strategic growth plans, Youverify is poised to play a vital role in strengthening Africa’s financial infrastructure while ensuring compliance and transparency.
