THE INVESTORS: KYC
Thenetworkeffect Goldman Sachs led Trulioo’s most recent funding round – but it brings more to the table than cash. As Managing Director of its Growth Equity business, Mark Midle says the bank can help advance the identify and verification specialist’s wider, global ambition The unprecedented expansion of online and ecommerce activity resulting from the COVID-19 pandemic, has placed identity verification provider Trulioo – fresh from a successful $70million capital injection – in a sweet spot in terms of its ambitious growth plans. As online traffic increases, firms large and small need the ability to check users are who they say they are – but without compromising their experience. A solution provider that can square that circle is in a winning position. A recent report by the Economist’s Intelligence Unit, Digital Disruption: Risks And Opportunities In The Shift To Online, estimates that online retail sales in the world’s 60 biggest economies surged by more than 30 per cent in 2020. And it anticipates further growth, suggesting that, by 2025, they could account for nearly 20 per cent of all retail transactions, up from 10 per cent in 2019… numbers beyond an emarketeer’s wildest dreams. Back in September 2019, when Goldman Sachs Growth Equity led Trulioo’s Series C fundraise, none of that, of course, could have been known. But, as Mark Midle, managing director at Goldman Sachs Growth Equity, who now occupies a seat on Trulioo’s board, explains, it was already clear that the company was acing the identity verification (IDV) market. “We’ve been following the shift to digital for several years and see identity verification as particularly critical, especially when companies don’t have face-to-face relationships with their customers,” he says. “Identity is a fundamental part of the digital experience, with regulatory and brand implications for platforms that fail to know their end users.” www.fintechf.com
“We were particularly impressed with the quality of Trulioo’s product – the most scalable and high-performing digital identity verification solution on the market – and the quality of its customers, which include hundreds of the world’s largest digital-first companies in financial services, payments, technology and commerce, who use Trulioo to support mission-critical operations across multiple geographies.” In addition to the $60million Series C raise, which was also backed by Citi, Santander and Amex, Trulioo attracted an additional $10million in unannounced follow-on funding from early investors, bringing total external investment since its creation in 2011, to $96.6million.
We’ve been following the shift to digital for several years, and see identity verification as particularly critical, especially when companies don’t have face-to-face relationships with their customers The fresh injection of capital helped to propel Trulioo into the top 100 fastestgrowing companies in its home country of Canada, as it continued its global expansion and further developed its proprietary GlobalGateway solution – a global marketplace for identity services and data sources with the potential to verify five billion individuals and 330 million businesses. The first trials of Trulioo’s EmbedID system, a low-code
international verification system aimed at online businesses for which ID verification services are critical but not a core competency, were also begun in 2019. These developments ensured that, when the world changed in March, 2020, the nimble fintech could adapt quickly to meet the needs of SMEs worldwide that found themselves suddenly having to implement digital solutions to meet the surge in consumer demand for ‘online everything’, while simultaneously remaining secure and delivering good customer experience. Trulioo responded by making its identity verification services available to these small businesses, offering them up to 100 free identity verification transactions a month. Explaining the rationale behind the decision, Trulioo’s COO, Zac Cohen, said: “The vast majority of small businesses simply don’t have the systems or financial reserves to respond to such immense disruption… [We] helped them mitigate their risk, build trust with customers and protect and grow their revenues in the most testing circumstances imaginable.” Indeed, a TransUnion survey, early in the pandemic, estimated that 22 per cent of retailers worldwide had been the target of COVID-19-related fraud. “We’ve seen ecommerce’s share of total retail nearly double in this environment, which is meaningful because ecommerce businesses don’t have face-to-face relationships with their customers, and verifying their customer identities is critical to protect their reputations and reduce fraud,” says Midle. Issue 19 | TheFintechMagazine
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