Verihubs Pockets Early Stage Funding of 39,9 Billion Rupiah, Soon to Release Credit Scoring Service

E-KYC service development startup Verihubs announced the closure of an initial $2,8 million (approximately 39,9 billion Rupiah) funding round led by Insignia Venture Partners with participation from Central Capital Ventures (CCV) and Armand Ventures. The company plans to expand into regional markets, as well as develop new products, one of which is credit scoring.

This round was also followed by a number of angel investors local startups. Among them, Budi Handoko (co-founder of Shipper), Jefriyanto and Ricky Winata (co-founder of Payfazz), Rohit Mulani (co-founder of Gotrade), Chinmay Chauhan (founder of Bukuwarung), and Pramodh Rai (former Chief Product Officer of Modalku). .

Previously, in the initial pre-stage round in 2019, Payfazz Co-founder Hendra Kwik and Xfers Co-founder Tianwei Liu participated in this stage in addition to Indigo Creative Nation.

Quote from TechCrunch, a number of angel investors this was previously a Verihubs service user. Together with Payfazz, Verihubs opens the opportunity for customers to deposit money with local agents to use for payments online, and BukuWarung, to access transaction data.

The two examples above are Verihubs solution for segment unbanked. Meanwhile, the company also serves the segment of users who already have a bank account. The inclusion of CCV as Verihubs' investor ranks opens the possibility of implementing e-KYC verification, especially for users who have bank accounts, because they can partner with BCA to access customer data.

As of now, there are 46 companies that have become Verihubs users, most of which are in the financial sector. It is targeted that the number of users will be doubled to 100 companies, because Verihubs technology can also be used for companies E-commerce, marketplace rentaland hospitality. One of the Verihubs users came from hospitality, they used the platform to make the process easier check-in room.

Verihubs Co-founder & CEO Rick Firnando said, before adopting Verihubs, many of its clients still verify customers manually, which takes between one to two weeks. Verihubs serves as an all-in-one verification solution to five seconds, using AI-based identity authentication technology and APIs that allow companies to continuously verify returning customers via SMS, WhatsApp or express calls.

"Because integration with many vendors is difficult for developer, that's why Verihubs allows clients to do KYC, offer phone number verification using WhatsApp or SMS, and also verify customer financial data," said Rick.

When users log into the app using Verihubs for the first time, they will be asked to take a selfie and then upload a photo of their government-issued photo ID. Verihubs AI technology compares the two photos to see if they match, and cross-references the ID with a telecom operator's credit score and Indonesian government database, including criminal records.

The company applies a business model based on transaction fees, the client will pay according to the number of successful verifications.

Rick continued, the company is building a credit scoring system based on transaction data and account balances. In addition, it plans to expand into regional markets, such as Vietnam and the Philippines.

“For the ID verification system, we found that Verihubs already has a product-market fit in Indonesia, but we want to expand it to new products. We consolidate financial data from multiple sources, not only for banks, but also for the unbanked population. And we are also exploring expansion into new markets, such as the Philippines and Vietnam.”

This startup just finished taking part in batch the summer of Y Combinator 2021, this funding is claimed to be the first AI startup from Indonesia supported by YC.

Verihubs was founded in 2019 in Jakarta by Rick Firnando who has more than 9 years of experience in the B2B industry, and Williem, an AI researcher who holds a PhD in computer vision from Inha University, South Korea.

Market competition

In Indonesia itself, there are already several services that target similar segments such as ASLI RI. In collaboration with LoginID, a Silicon Valley company, ASLI RI launched AsliLoginID, a Biometric-Authentication as a Service (BaaS) platform that has FIDO2 certification. The certification is one of the most stringent security standards today, is internationally recognized and compatible with various types of computing device operating systems.

In addition, one of the service development startups based on artificial intelligence Nodeflux also has a business line that focuses on developing solutions to simplify the eKYC process, namely Identifai. Nodeflux itself is one of the partners of the Directorate General of Civil Registration as a joint platform provider to provide the best performance in data utilization without security risks.

Regarding the SaaS industry landscape that specifically develops API-based verification solutions, Rick also said that in terms of education, the target market for this service already has a good understanding of the importance of verification solutions. "As the fintech industry and other digital-based companies grow, this solution will be increasingly needed and developed," he concluded.

According to a report from ReportLinker, the global software as a service (SaaS) market is expected to grow from $225,6 billion in 2020 to $272,49 billion in 2021 at a compound annual growth rate (CAGR) of 20,8%. The market is expected to reach $436,9 billion by 2025 at a CAGR of 12,5%.