Onfido closes $25M to secure the on-demand economy

Identity verification and background checks are now a (very) real thing for on-demand and fintech

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Who would’ve thought that the rise of peer-powered services would necessitate a new, efficient way of running background checks? At least one startup.

Onfido, provider of identity verification and background checks, today announced that it has closed a $25 million Series B round of funding from Idinvest Partners, Wellington Partners, and CrunchFund.

In total, the company has raised over $30 million from those investors in addition to Oxford University, which is where the three co-founders met.

The problem Onfido seeks to solve is simple. Take the biggest, most obvious example of an on-demand company: Uber. This company completely upended the taxi industry—a decades-old industry with regulations and requirements for employing drivers—by letting anyone hail a ride with the press of a button. And yet, how can you be sure Uber did their homework on the person picking you up?

Some would say you can’t be sure. Say what you will anecdotally about your experiences with Uber or other ridesharing apps, but there’s no denying the company has suffered from a string of tragic stories over the past few years involving everything from petty conflicts to rape and murder. In fact, the company recently agreed to pay up to $25 million in a settlement with the cities of San Francisco and Los Angeles, who sued Uber for its misleading marketing message of “the safest ride on the road.”

Uber isn’t a client of Onfido’s, but the newly funded startup does work with many of Uber’s peers in the on-demand economy, including onefinestay, SmartRecruiters, Turo, BlaBlaCar, TaskRabbit, and Handy (whose co-founder and CEO will be speaking at Vator Splash next month).

Onfido says it has more than 1,000 clients today.

“Powered by machine-learning, we 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,” said Husayn Kassai, CEO and co-founder at Onfido, in a prepared statement. “Only when the identity has been verified do we run further searches such as Criminal or Anti-Money Laundering checks. This means we can always be certain that we’re checking the right person and preventing individuals from cheating the system by committing identity fraud.”

In addition to working with sharing economy companies, Onfido also offers its solution to fintech companies like LendInvest that need a quick, digitally-powered way to check that potential new customers aren't fraudsters.

Based in London, Onfido has since opened an office in San Francisco to help it expand its U.S. operations, which have been growing 40 percent month-over-month. The company will use its new funds to continue expanding across the U.S. and internationally in South America and Asia.