Veriff, an Estonia-based technology company focused on identity verification, announced today that it has secured $69 million in a series B funding round led by investment firms IVP and Accel.
“At Veriff, we are building a platform based on trust and transparency, and this latest round of funding puts us one step closer to eliminating widespread identity fraud,” said Kaarel Kotkas, co-founder and CEO in a company statement. “Achieving the highest Series B raise to date in the IDV market is a testament to Veriff’s role as the premier identity verification platform and we look forward to working with our customers to ensure trusted data retention and online identities on a global scale.”
Veriff co-founders (l)Kaarel Kotkas and (r) Janer Gorohhov.
The company has taken on $92.8 million in funding to date since it’s founding by the then 20 year-old Kaarel Kotkas in 2015, pointing to the company’s fast growth and the size of the potential market. The Global Identity Verification Market is expected to reach $17.8 billion by 2026, rising at a market growth of 13.4% CAGR over this period according to data from KBV Research.
Kotkas and co-founder Janer Gorohhov created a unique approach to identify verification using video and AI to evaluate ID photos. “We are living in the times now of deep fakes and the cost of doing fraud is fairly low on a picture only. So instead of just having a picture, we started with the idea of having a video of a person showing their ID. Then you already have over 300 valuable frames of ID,” says Kotkas. Early on they were able to gain market adoption using this approach from the Estonian banking sector and the business took off from there.
Though a small country, Estonia has an advanced digital identity market. Its 1.3 million population has been conducting their daily lives through digital identity for over 20 years, including voting online. “The only thing you can't do in Estonia online is getting married.You still have to show up in person, but all other services are available. The same thing now is available on a global scale through our technology. A strong verification process has enabled us now to go into other sectors like Universities running remote examinations and all the new marketplaces and services that demand trusted relationships from a distance,” says Kotkas.
Kotkas came to know something about digital identity from an early age. Growing up was on a small island, the only way for him to be connected with the outside world was through his computer. “Twelve years ago, buying foods from Ebay, the only payment option was to use Paypal. When I tried to open up a debit account, they asked me to upload a copy of my ID. They sent me an email stating I was not allowed to use their service as I was only 18 years old. And at that time, without thinking twice, I just changed my date of birth from 1994 into 1984, uploaded the same document and all my orders got confirmed,” says Kotkas. The experience set him on the path of developing a better and more secure ID verification process.
In 2015, Kotkas was working with online payment company Transferwise (founded by fellow Estonians Kristo Käärmann and Taavet Hinrikus, now based in London and re-branded as Wise) to help them solve the same identity problems he experienced with Paypal. He realised it was a problem that couldn’t be fixed without starting from scratch on a new approach. He left Transferwise the same year and founded what would become Veriff. “People are subjective by nature and we can't trust our eyes. We need more than just pictures to make a decision from this stance. And this is how Veriff was born,” says Kotkas.
Today the company is growing 6X year-over-year in revenue and has 250 employees with offices in London and New York beyond its headquarters in Tallinn, Estonia. Kotkas sees its home base in Estonia as a strength for the company. “We have here already in our office 34 different nationalities. Forty percent of our team has moved to Estonia with their families and created our own ecosystem here. We know each other quite well. And I think this is the secret sauce of Estonia. We work with each other very closely so we can be more attractive to people and talent from all over the world,” says Kotkas.
As for the future? Kotkas believes Veriff can become the universal platform for identity verification for governments and business.
“It becomes more clear that there are 200 million businesses in the world that eventually have to move online. There are six billion people that need to have access to and control over their own digital identities. So it’s exciting and this is what drives us forward,” concludes Kotkas.
