Onfido is an interesting startup in an arguably boring space.
That space is background checking, the seemingly mundane act of gathering intelligence about a prospective employee in order to determine if they're a good fit for the organization. In a traditional employment situation, where things move at a generally sedate pace, traditional models of background checking, involving manual processes to check criminal records, driving history and sex offender records, among other things, was an acceptable burden. Since employment processes tended to take awhile, waiting a few days for manual checks was OK.
Fast forward to today and we have a very different situation where the massive number of sharing-economy services (Uber, Lyft, TaskRabbit et al) means that someone can expect to sign up to provide a service, and begin earning cash pretty much straight away. In this model, the traditional methods of background checking just don't work.
Onfido, on the other hand, uses artificial intelligence and machine learning to not only gather the obvious data (name, date of birth, etc) but alternative data in order to build a sophisticated fraud detection engine over time. Onfido uses API-driven connections between its own platform and other services in order to streamline the process. Of course, many jurisdictions don't have API access to the records Onfido needs, a critical flaw that does, to an extent, hamper their scalability.
This barrier notwithstanding, Onfido seems to be doing things right. The company is today announcing a Series B funding round to the tune of $25 million. Participants in the round include Idinvest Partners, Wellington Partners Venture Capital and Crunchfund. According to the company, some of the funds will be used to resolve the technological barriers that somewhat hamper the scaling of their U.S. operations -- it will be interesting to see what they come up with there.
Already they've seen 40 percent month-on-month growth in their U.S. business -- this funding should help that ramp up. Onfido promises that they have built a product that allows businesses to accurately verify the identity of anyone in the world -- a driver in Delhi, a cleaner in Berlin, a host in New York -- within seconds. Only when the identity has been confirmed, does the platform run further searches such as criminal or watchlist checks.
The company has grown to a point where it has over 1,000 sharing economy and FinTech customers including TaskRabbit, WorkMarket, and Turo. Husayn Kassai, CEO and co-founder at Onfido, says, “background checking isn’t new -- what has changed is business. Legacy background checks -- manual and dependent on a face-to-face meeting -- worked for an offline world. Today online companies need a new system that works instantly and remotely." The company has performed over 10 million background checks to date.
Founded by three Oxford University entrepreneurs, Onfido looks to be doing good work -- it will be interesting to watch them grow.
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