Smile Identity, a KYC compliance and ID verification startup, has sacked eight members of staff as it aims to focus on profitability.

Smile Identity is one of the most popular organizations in the ID verification industry. They help companies that are just starting out like banks and fintech carry out identity checks for their customers.

The company reported that it sacked eight members of staff early in June.

The company in a statement said,

“To better navigate the changing macroeconomic landscape of the tech startup world, we decided to reduce our team size to focus on profitability and product development. We let go of 8 employees, representing less than 10% of our workforce.”

In February, smile identity announced the completion of a $20 million Series B round of funding making the announcement of the layoff a shock to many. Smile Identity said the funding would be used to build the hiring efforts in East, Southern and Western countries in Africa conforming to its goal of further expansion in Africa. The startup in April, bought the Ghanaian identity verification software, Appruve, to broaden its horizon across Africa and go hard on its position as Africa’s leading identity verification and digital KYC Company.

Smile Identity: A Brief on How It Began

Founded in 2017 by Mark Straub and William Bares, Smile Identity has grown to where it is today due to the consistency of the founders. Straub went on several trips regularly between Mumbai and Nairobi, spending up to ten years in Mumbai, India.  It was seriously frustrating to get SIM cards or provide identity checks in India, in the early months of 2000. Things began to change swiftly when India Stack started its operation. The India stack as a software platform provides businesses, startups and developers with easy identification, verification, and authentication processes in different companies.

According to Mark,

“People could easily do things like KYC to sign a document digitally, to share or federate documents across a company or school, to prove a birth certificate, or to prove an educational credential. It really unleashed this wave of innovation, entrepreneurship activity and fundamentally changed financial services and eventually share economy services in India.”

This idea made India advance greatly so Africa had to catch up with the trends. A lot of businesses in Africa still found it difficult to onboard new customers, and staff members without wasting time on the onboarding processes and paperwork.

“I’d seen for 10 or 15 years how long Indians had been waiting and how many problems this set of new national ID combined with these different software protocols solved. I saw how much friction the Stack removed from people’s lives. And I thought if only there was an African stack.”

Straub said he met with some entrepreneurs in Nairobi and started brainstorming and they figured that a Stack was to be built in Africa, three factors needed to be considered; the cost, government independence and technology. It was also at the time that face recognition on a variety of smartphones had filled the smartphone market and advanced the state of verification in a swift manner.

 With these, Mark Straub and his business partners founded Smile Identity and built a face-recognition that was more accurate for Africans.

“We were able to combine that over time by matching selfies against either identity documents or photos on file at ID issuing authorities. And it was really the combination of those two technologies — the face recognition and all the liveness checks and, and anti-fraud checks that go with it, combined with verifying for the source of truth.”

Currently, Smile Identity’s presence can be felt in six markets in Africa: Nigeria, Kenya, South Africa, Ghana, Rwanda and Uganda. It works on more than 250 million identifications and verification for 15 different ID types while working on over 1 million identity checks on a monthly basis.

Smile identity software is used in the banking and fintech sector and telecommunications. The company stated that it has over 80 users who are charged on a per-query basis. They are payments companies like Paystack, Paga and Chipper Cash; Kuda MFB and Umba; banks like Stanbic IBTC; crypto currency exchanges like Binance, Luno and Paxful; and supply-chain businesses like Twiga.

According to the founder, Smile Identity assists their clients like the fintechs find good and potential bad users who might ruin their businesses.

 “We are an accelerant of the growth of fintechs and shared economy companies because they know when they spend money on customers; those are real customers because they have actually done verification with us.”

Smile identity got a funding of $4 million and there are plans put in place to improve on their services, widen their tentacles in more markets and get a good return on investments.