Here are the key questions to ask, and processes to follow, before technology implementation. By JD Engelbrecht, MD: Everlytic With many organisations increasingly turning…
Regtech — or platforms and apps aimed at simplifying compliance with regulations — is big money in South Africa.
This was confirmed after Johannesburg based regtech startup Intergreatme was last month able to raise a whopping over R32-million (against a R24-million target) through crowdfunding platform Uprise.Africa, in just a matter of days.
The global regtech market revenue was estimated last year to be worth $2.3-billion dollars and is expected to grow to $7.2-billion by 2023, according to a report in October last year by Analytical Research Cognizance. A second report, released in December by Markets and Markets, estimates the market to at $4-billion, growing to $12.3-billion by 2023.
Intergreatme is not the only company to look out for in the sector. Ventureburn highlights three others to watch. Here they are:
Johannesburg based startup Intergreatme — which was founded in 2016 by James Lawson, Dewald Thiart and Luke Warner (pictured above, from left to right) — has an identity management platform which provides users with control of their identities across the sectors of financial services, telecommunications and insurance.
The platform also allows businesses to comply with the Financial Intelligence Centre Act (Fica), the Regulation of Interception of Communications and Provision of Communication-related Information Act (Rica), the National Credit Act regulation (NCA) and Protection of Personal Information (POPI) regulations.
Last month the startup was able to raise a whopping over R32-million (against a R24-million target) through crowdfunding platform Uprise.Africa in exchange for a 25% share in the startup (see this story and this one).
Intergreatme business operations head Garyth Ditchfield told Ventureburn last month (see this story) that since inception the startup has raised a further R22.5-million from a number of investors, including former MTN chief innovation officer Herman Singh and eBucks and Centbee founder Angus Brown. The startup’s most recent investors include BEE investment group OceanOn76, which invested in the startup last year.
Intergreatme CEO Luke Warner, who formerly worked at Standard Bank, told Ventureburn that the investments the startup has been able to net from various investors have come “one at a time” at the startup has met various milestones, citing amounts like R750 000, R850 000, R1-million and R2-million.
The startup has also won various awards. In October last year it took home the prize for the most innovative solution at the sixth edition of the MTN Business App of the Year Awards held in Johannesburg (see this story). The startup is also a past participant of the Standard Bank Incubator in Johannesburg.
Initially to gain traction, the startup built use cases for property managers on recording security access control details and that allows officials from courier companies to sign in when delivering parcels.
The startup’s biggest risk is that of a data breach, but Warner says because personal information of users is spread across what he calls “silos”, he argues that it’s very difficult for a user’s entire profile of personal data to be hacked.
This Cape Town-based regtech startup uses an array of tech that includes artificial intelligence, bio-metrics, machine learning, and tamper detection.
In 2017 ThisIsMe claimed to have set a new record for making a Fica filing on behalf of accounting institutions — claiming that it can do the filing in just three minutes, down from the two days to two weeks it usually takes (see this story).
Consumers that have used ThisIsMe are able to skip queues and register new accounts within minutes instead of days, from anywhere in the world.
The startup was founded in 2014 by Juan Furmie and David Thomas (pictured above). Mark Chirnside served as the company’s CEO from 2014 until he left the company in late 2017.
The startup attracted $2.5-million in funding in 2016.
Furmie told Ventureburn in a call earlier this week that the startup has since concluded a second round, in 2017, for “about $2-million”. While he said the second round involved the same investors from the first one, he did not want to divulge who these were.
He said Chirnside’s parting from the company in 2017 was over a “difference in opinion”.
Furmie said the startup currently has five permanent employees and a number of contractors.
While the startup in 2016 said it was expanding into African and international markets and counts Investec and Silica as clients, Furmie said the startup has merely “assisted” in clients in some countries, however he did not name which these were.
Lately the startup has won various awards. In May last year ThisIsMe won the Best RegTech Solution category at the fourth edition of the recently held Benzinga Global Fintech Awards (see this story). The startup was last year also featured as one of the Emerging 50 Rising Stars in H2 Ventures and KPMG’s annual global report, the Fintech100 (see the list here).
In November last year the startup was named the winner of AfricArena’s RCS Group Challenge. The RCS Group sought a solution that could store and secure customer identity and authentication credentials (see this story).
DocFox — which was founded in 2014 by Richard Cohen and Ryan Canin (pictured above) — has developed a platform that allows its corporate clients to comply with Fica regulations. The company currently has offices in South Africa and the US, with about 16 staff in all.
Canin told Ventureburn in an email this week that the startup currently works with over 125 financial institutions — in the US and South Africa — and is growing the number of users to manage their Know Your Customer (KYC) and anti-money laundering compliance.
DocFox enables financial institutions to carry out KYC procedures on any entity or natural person, from any country in the world. Canin says DocFox’s platform can be used to onboard any type of entity from the most complex of offshore structures in any jurisdiction to any natural person of any nationality.
“We typically work with financial institutions with more complex client bases. But we have clients from the largest law firms to property managers, hedge funds to banks and everything in between,” he said.
Cohen said for its first two years the company focused on modifying consumer’s behaviour through incentives, but pivoted three years ago to focus on offering corporates help with complying with FICA regulations after learning that this was the biggest challenge for their clients.
Since inception DocFox has raised over $2.5-million through three funding rounds, the most recent being last month when it raised a round from existing shareholders for a small acquisition.
The founders did not disclose to Ventureburn the equity stake this was in return for, but Cohen said the investors who took part include a funder based on the West Coast of the US, another in Florida, one in Israel and a group of South Africans.
Canin said 90% of the startup’s first investor base was comprised of Silicon Valley based angels.
These he described as a mix of angels with investor backgrounds, including someone from the early days at Google who later ran one of their divisions, to another who is the past vice chairman of one of the largest asset managers in the US and other angels who have provided seed capital to multiple US unicorns.
Subsequently most of those investors provided further investment in a follow-on round and were joined by several SA investors — all who have started and exited some of SA’s most successful fintech and tech companies, according to Canin.
Entersekt, which is headed by CEO Schalk Nolte (pictured above), provides authentication and mobile-security solutions for financial services providers around the world.
While Entersekt doesn’t offer regtech solutions per se (the company’s software helps banks and other large enterprises to achieve compliance with certain regulations, but doesn’t manage and measure regulatory requirements as a whole) Ventureburn opted to include the company in the list because it operates partly in the regtech vertifcal.
The startup is an innovator in push-based authentication and app security also operates in the regulatory space by helping banks to be compliant with regulations while ensuring customer information is protected.
The company has grown from a team of five to about 140 people late last year, since it was founded in 2010 by Nolte’s brother Dewald and three other Stellenbosch University students.
In April the company announced that it would open its ninth office, in Century City, Cape Town, on 1 June. It has offices in a number of other locations, including Utrecht, Munich, London, Mauritius and Johannesburg.
The company’s senior VP for engineering, Richard Bailey, said in a statement at the time that hiring people from in and around the Cape Town CBD continues to be a challenge with the company’s headquarters in Technopark, Stellenbosch. It’s for this reason that the company opted to set up new offices in Century City.
Bailey said at the time that recruitment was underway for the new software engineering division that will occupy the Apex building office from the beginning of June.