Voice of the Industry

2022/2023 Regtech and IDV Buys & Investments Analysis - Asia, LATAM, and Africa

Thursday 16 March 2023 12:06 CET | Editor: Mirela Ciobanu | Voice of the industry

Our third instalment delves into the M&A activity happening in several markets: Asia, LATAM, and Africa.


In 2022, the Asia-Pacific region was expected to register the highest CAGR in the global regtech market, followed by Latin America, the Middle East & Africa, North America, and Europe. The rapid growth of this region is attributed to various factors, such as the increasing demand for effective digital payment services, the presence of fintech hotspots, and the growing emphasis on virtual currencies like cryptocurrency. Additionally, heavy investments in fintech projects in China, favourable government initiatives in India supporting the development of regtech solutions, the thriving startup and tech community in financial services, and leading companies' emphasis on providing risk and compliance solutions have contributed to the region's growth.


Regtech and blockchain analytics funding and acquisitions

Silent Eight, a provider of AI-driven economic sanctions enforcement and financial crime prevention, raised USD 40 million to enhance technology capabilities to support Silent Eight's growing customer base. Later in 2022, Signzy, a digital banking infrastructure startup, raised USD 26 million to support the growth of its platform. The platform, aimed at financial institutions, helps automate risk and compliance processes. Signzy was founded in 2015 by Ratan, Ankur Pandey, and Arpit Ratan and provides API solutions for the real-time digital onboarding of customers to banks and FIs. With over 240 APIs powered by AI across various financial services use cases, Signzy has more than 10 million monthly onboardings and provides KYC solutions to over 300 global banks, insurance firms, and asset management companies. Singapore's Standard Chartered Ventures also invested in Chekk, a Hong Kong-based platform for Know Your Customer (KYC), Know Your Business (KYB), and data, to accelerate product development and sales.

Merkle Science, a predictive blockchain analytics platform, raised USD 19 million to tackle bridge exploits following losses of billions of dollars in the crypto industry due to vulnerabilities in some DeFi protocols. This funding round brings the total funds raised to over USD 24 million, which will be used to expand Merkle's presence in the US and fund research and development for forensics and analytics tools for emerging technologies such as DeFi and cross-chain bridge protocols.

In terms of acquisitions, Thunes bought a majority stake in AML and compliance platform Tookitaki for over USD 20 million in Asia’s regtech space. Thunes and Tookitaki allied to enable payments and financial institutions to embed automated and streamlined compliance processes, reducing risks and costs. Both companies will continue to operate independently, with the alliance augmenting their businesses and enabling them to accelerate their global expansion.


IDV funding

Digital trust provider Privy secured USD 48 million in a Series C funding round with global investment firm KKR as the lead investor to reinforce its position as a digital signature and identity provider in Indonesia. The investment aligns with Indonesia’s digital transformation commitment and the development of the digital community in Southeast Asia. Privy aims to expand into overseas markets to capitalise on Indonesia's projected digital economy growth of USD 146 billion by 2025 and a value of over USD 300 billion by 2030.



Singapore-based digital identity company FlexID received funding from Algorand to provide self-sovereign IDs to the unbanked population in Africa. Although the size of the investment was not disclosed, this funding will allow FlexID to offer a decentralised identity network to over 60% of unbanked adults in sub-Saharan Africa according to World Bank estimates for 2021. As of 2014, only 30% of Zimbabwe's adult population had access to financial services, however, Zimbabwe's financial inclusion scheme from 2016 to 2020 helped increase the percentage of adults with access to financial services to 55%, which amounted to 8.5 million bank accounts in 2020. FlexID aims to extend its reach to emerging markets, where over one billion people lack formal identification.

In our previous editions of regtech M&As, there wasn’t much activity reported in LATAM & Africa. However, in 2022, several IDV companies received funding to help reduce fraud in these emerging markets and boost financial inclusion.



Fraud is a major problem in Latin America, with around 20% of overall revenue lost to fraud - second only to South-East Asia. The increasing popularity of digital wallets and mobile payments is fuelling this issue. One such example is Pix, an instant payment platform and digital wallet developed by the Brazilian Central Bank in 2020. It has become a phenomenon, with Brazil recording 8.7 billion real-time transactions in 2021, which is expected to rise to over 82 billion by 2026. However, the rapid adoption of this technology creates potential security gaps that fraudsters are quick to exploit. Scams using fraudulent Pix payment QR codes have been reported, and there have even been instances of kidnappings where victims are forced to transfer funds using the app. This is a risk with all digital wallets if your phone is stolen, and so is your payment app.

Also, with the expansion of Open Banking and the phenomenal rise of ecommerce and digital payments in the region, data security has become an urgent matter for companies and users in Latin America. These trends prompt the need for security solutions.


IDV funding in LATAM

In April 2022, unico achieved unicorn status in Brazil as it announced a successful USD 346.3 million funding round led by General Atlantic and SoftBank. The round included investors such as Ribbit Capital partner Micky Malta and Big Bets. With a market value exceeding USD 1 billion, unico is the newest Brazilian unicorn. The company's digital identity protection solutions are in high demand, with around 800 clients, including Magazine Luiza, Pernambucanas, C6Bank, Banco Original, and B2W. The funds raised will be used to support unico's expansion into North America and international growth. The company has been growing through acquisitions, including Meerkat in 2020, Vianuvem, and CredDefense in 2021. In 2021, unico joined the ranks of Brazilian unicorns, following Madeira Madeira, Hotmart, and Mercado Bitcoin.

A few months later, CAF (formerly Combate à Fraude), a Brazil-based digital identity verification provider, raised over USD 19.4 million. CAF’s platform addresses a critical need for secure identity verification and digital onboarding in the Brazilian fintech market.



Africa's e-payment market is rapidly changing due to evolving consumer and business behaviour, government support, and regulatory improvements. Alternative payment methods such as mobile money, digital wallets, and virtual cards provided by local and international fintech players and telecom companies are gaining traction. With an increase in real-time payment infrastructure, instant account-to-account transactions are becoming more accessible. Additionally, central bank digital currencies (CBDCs) are being developed in over ten African countries, providing solutions for offline payments, cross-border payments, and targeted cash transfers. Private stablecoins are also gaining utility with over USD 150 billion in circulation globally. Despite the volatility of crypto markets, small retail transfers of USD 1000 or less have increased in Sub-Saharan Africa.

As more payments are made online, according to a recent study by FICO, South Africans are increasingly concerned about fraudsters using their personal information for financial gain. Of those surveyed, 36% were worried about identity theft, while 28% were concerned about account takeovers. Disturbingly, 17% had already fallen victim to account fraud. Other important aspects to consider related to the (digital) money movement in Africa are related to money laundering and terrorist funding. In recent news, South Africa, and Nigeria, the two largest economies in Africa, have been placed on the ‘grey list’ of countries that need to do more to combat financial crime by the Financial Action Task Force. The Paris-based organisation has highlighted shortfalls in their ability to combat illicit finance and organised crime, increasing scrutiny from global investors and banks.

In response, African regulators are working to create a more secure, stable, and inclusive financial environment by modernising regulations and improving know-your-customer requirements. As a result, investors are flocking to African fintechs, with more than 60% of venture money above USD 200,000 going to African fintech firms in 2021. Notably, fundraising rounds above USD 50 million increased tenfold from the previous year, while the industry saw annual growth of 264% —the highest on record. McKinsey experts suggest investors can capitalise on this trend by building investment platforms across the industry or by orchestrating the emergence of regional and continental players.

IDV funding in Africa

Identitypass, a cybersecurity and anti-fraud startup headquartered in Nigeria raised USD 2.8 million in seed funding to expand its product offerings and extend its platform to new regions. Its suite of products serves multiple sectors, including fintech, cryptocurrency, mobility, EdTech, gig economy platforms, and telecommunications companies. The company's primary services include verifying businesses and detecting cyber threats and fraud. It processes millions of verification calls monthly for over 200 companies in Nigeria, the UK, Kenya, the US, and India.

At the beginning of 2023, Smile Identity, a provider of digital identity verification solutions for Africa, secured USD 20 million in Series B funding. In 2022, the company doubled its customer base and tripled its revenues. As highlighted in their 2022 annual KYC report, Smile Identity completed an estimated 50 million KYC and identity verification checks for hundreds of clients, solidifying our position as Africa’s experts in digital identity. The company has integrations to more ID databases than any other KYC provider in Africa and provides compliance and anti-fraud solutions to many of the continent’s champions in banking, lending, payments, remittances, cryptocurrency, and the shared economy. The company’s vision is to make Africans among the most trusted consumers in the world.


We hope you enjoyed our 4-part series on M&A and funding articles on regtech and IDV. If you have any other important players in these regions to share, we would love to hear from you at mirelac@thepaypers.com or editor@thepaypers.com.

In May, we will be launching our Financial Crime and Fraud Report 2023, where we will delve even deeper into these topics. The report will provide an overview of the most significant regtech and identity verification market players, giving investors and vendors valuable insights to help them stay informed about the latest market developments and make informed decisions. We can't wait to share it with you!


About Mirela Ciobanu

Mirela Ciobanu is Lead Editor at The Paypers, specialising in the Banking and Fintech domain. With a keen eye for industry trends, she is constantly on the lookout for the latest developments in digital assets, regtech, payment innovation, and fraud prevention. Mirela is particularly passionate about crypto, blockchain, DeFi, and fincrime investigations, and is a strong advocate for online data privacy and protection. As a skilled writer, Mirela strives to deliver accurate and informative insights to her readers, always in pursuit of the most compelling version of the truth. Connect with Mirela on LinkedIn or reach out via email at mirelac@thepaypers.com.

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Keywords: The Paypers Quarterly Analysis series, identity verification, regtech, investment, financial institutions, fraud prevention, financial inclusion, digital identity, blockchain, cryptocurrency
Categories: Fraud & Financial Crime
Countries: Africa, Asia, Latin America
This article is part of category

Fraud & Financial Crime