Valify Solutions, a company that provides Electronic Know Your Customer (e-KYC) service, aims to expand in the Gulf countries next year, according to its co-founder and CEO Omar Abdel Wahid. The e-KYC service has enabled the company to become one of the most influential entities in the field of digitization and technology and to partner with major financial institutions and banks in Egypt.
In an interview with Daily News Egypt, Abdel Wahid said that his company is considering Saudi Arabia and the UAE as the first destinations for its expansion abroad, hoping to generate hard currency from these markets. He also said that the company expects to reach the break-even point and turn profitable next year, especially after extending its services to the non-banking financial sector, particularly insurance services.
He explained that the customer journey starts with downloading the app or visiting the website of the company or the bank that wants to use its services and creating an account. Then, Valify performs several steps to identify the customer within the account creation process, such as taking a picture of the national ID card and taking a selfie with different facial expressions to ensure that the program is dealing with a real person. Valify also verifies the information and the customer with civil status authorities, while ensuring that the identification process is fast and organized.
He pointed out that before Valify, the customer identification process was done manually by an employee of the institution, requiring the customer to go to the branch and wait for a long time. Valify has made this service available electronically, aiming to save time and effort for customers so that they can complete the identification process quickly and from anywhere.
The e-KYC is a digital method that improves how companies verify their customers’ identities, ensuring compliance with KYC regulations and preventing money laundering and financial crimes.
He said: “Valify is a combination of the words ‘validate’ and ‘verify’. Valify Solutions eliminates the need to be physically present to prove your identity, allowing you to do it online using some personal details. For example, you don’t need to go to the bank to update your personal information, and you can do it online through our services. We confirm and verify individuals’ identities in real-time, and we hope to offer the same services to companies soon.”
He revealed that the company plans to conduct a funding round soon after employing the funds raised in the previous round by investing in providing the necessary technological infrastructure. He said that the company has started negotiations with investors to expand its investments and finance its external expansions next year.
He mentioned that the company raised about $1m in a funding round led by A15, a leading tech investor in the Middle East region, along with several investors from Africa, the UAE, and others. His father also participated in the round as an angel investor. Other investors include 4DX Ventures, Tawseel, Sarah Investment Group, and Selma Rebecca.
He said that the company invested $1m in forming a team of experienced engineers to work on this project, building everything related to its activity, infrastructure, and technological systems from scratch.
He added that the company is working on adding a new service to verify and identify companies. This service will help customers check the legitimacy and validity of the companies they want to deal with, such as their commercial records, tax files, and owners.
He also said that the company plans to expand its digital contract activity after getting the necessary legislation from the Financial Regulatory Authority (FRA). The company aims to secure contracts in various sectors, especially the non-banking financial sector, the insurance sector, and the consumer finance sector.
He said that Valify has more than 30 clients from different sectors, with a focus on the financial sector due to its high demand for e-KYC services. The company has also worked with companies in other fields like e-commerce, logistics, and delivery services, as well as entities like the National Telecom Regulatory Authority (NTRA).
He admitted that the company has faced some challenges due to the economic conditions and inflation, such as the difficulty in accessing hard currency, the depreciation of the local currency, and the migration of some engineers and employees to work abroad. He also mentioned the increase in the cost of design tools, which forced the company to use lower-cost alternatives. He said that the restrictions on the use of direct debit cards have made it harder for startups like Valify to access foreign currency.
He answered a question from Daily News Egypt about verification error rates by saying that before the digital transformation, error rates were high due to manual data entry and possible corruption or bribery. He said that the technological transformation aims to provide faster and more secure service, reducing fraud and errors in the system. However, he acknowledged that there is still a very small margin of error where the system can be bypassed.
He said that Valify has dealt flexibly with its new clients at the beginning of the contract, compensating them for every client who could manipulate and bypass the e-KYC system. He said that this has built trust in Valify’s services. He added that the company has focused on designing a system that ensures security and trust for both companies and banks and their customers while providing a good service experience and a worthwhile investment.
He added that many international companies are operating in this field, such as Onfido, Jumio, and IDEMIA, who have invested heavily in their systems and become worth billions of dollars. He said that he decided to invest in building a similar system and study its applicability in Egypt.
Abdel Wahid suggested that startups should be flexible and look for alternatives and solutions, such as using local technologies and tools that do not depend on foreign currency, and collaborating with manufacturing companies to improve and develop them. He said that using local technologies has economic benefits as it helps the country achieve technological self-sufficiency. He also said that major institutions and companies are interested in digitization and expanding technology with good service quality and cost, which attracts them to use Valify’s services instead of high-cost foreign companies, enabling Valify to reach more customers.
Valify is a company that specializes in digitization, based on digital identity verification. It started its operations in 2019 after noticing a gap in the Egyptian market, especially in the field of digitization, as many companies were shifting to digitization and technology in various fields, but customer registration and identification processes were still an obstacle to digital transformation.
