Nigerian digital ID startup Regfyl raises $1.1M to address Africa’s AML compliance challenges

Regfyl, a Nigerian digital identity verification and fraud detection startup, has secured $1.1 million in a pre-seed funding round. This capital injection will help the company tackle the mounting financial crime and compliance challenges faced by fintech companies and banks across Africa, where strict regulatory requirements continue to grow.

Co-founders Tunde Ibidapo-Obe and Tomiwa Erinosho say their focus is to streamline anti-money laundering (AML) compliance for African fintechs and banks. Their startup’s launch comes at a time where the Nigerian Financial Intelligence Unit (NFIU) reports that over 90 percent of fintech companies face difficulties in meeting AML requirements.

We’re not just applying Western models to African problems,” says Erinosho. “Our AI is trained on regional data to detect and prevent fraud unique to our markets.”

With plans to use the new funding to expand its business development, engineering and customer success teams, Regfyl’s platform combines several checks into a single API request.

For instance, its onboarding package includes Politically Exposed Persons (PEP) screening, checks against local and international sanctions lists, and ID verification. Additionally, the company’s transaction monitoring system, which uses AI and is tailored to the specific needs of Africa’s financial sector, distinguishes it from some other providers.

“African financial institutions are caught between rapidly evolving regulations and the need for efficient operations,” says Ibidapo-Obe. “We’re building a bridge to help them navigate this complex landscape.”

Investors in the pre-seed funding round include Techstars, RallyCap Ventures, DCG Expeditions, Africa Fintech Collective and Musha Ventures, and a number of strategic angel investors.

The rise of identity verification startups in Africa

Regfyl’s fundraising success comes amidst a broader wave of identity verification startups emerging across Africa. These companies are leveraging technology to address the continent’s unique challenges, including limited access to traditional identification methods, BitcoinKE reports.

Startups such as Smile ID, Youverify, and VerifyMe similarly provide technology that streamline identity verification for businesses in sectors such as banking, telecommunications, and e-commerce.

Earlier this year, Youverify received a $2.5 million pre-Series A investment from Elm, to help strengthen its mission to expand its Africa-focused AML compliance operations globally.

Regfyl says it is already working with fintech companies and financial institutions across Nigeria.

Article Topics

Africa  |  African startups  |  AML  |  biometrics  |  digital identity  |  fraud prevention  |  identity verification  |  investment  |  KYC  |  Nigeria  |  Regfyl  |  startup