Why We Invested in TrueBiz: Startup to Build the KYB Infrastructure of the Future

We are excited to announce our investment in TrueBiz. As fintech-focused investors with a deep interest in regtech and financial services infrastructure as part of a fair financial system, we have been actively tracking the know-your-customer (KYC) and know-your-business (KYB) market. While there have notable advances in KYC, we know that KYB solutions are not where they need to be.

There is a need for KYB and underwriting solutions that improve the ability to verify and complete diligence on a wide range of businesses (based on size, age, location, vertical, etc), digitally and speedily and in a way that minimizes the potential for fraud. The first generation of tech companies in this space, going back a decade, while widely used, suffered from sub-par technology and UX and offered abysmally low completion rates. More recently, a new generation emerged that improved completion rates but still suffer from unverified data, manual review of documents, fraud exposure and low completion rates. There is clearly room for significant improvement.

Getting KYB and underwriting correct is becoming more critical as fraud associated with business accounts has grown in recent years. Business accounts with their higher average balances are often more attractive to fraudsters. In fact, in its comprehensive analysis of PPP-linked fraud, the U.S. Congress frequently noted KYB shortcomings across a range of providers. As fraud increases, banks and other providers need a more robust method to verify business customers that might be perceived as risky.

When we met TrueBiz’s Danny Hakimian and Max Morlocke we knew we were talking to founders who had the passion, knowledge and focus to build a category-defining business in this space. Danny spent 6 years leading enterprise sales for Onfido in the U.S., one of the most successful KYC startups. Max previously built a data processing technology company and scaled AllClear ID.

The ultimate vision of TrueBiz is to create a single sign-on for business identity. Once a business is verified with TrueBiz, that business will have the ability to reuse credentials on the TrueBiz network, in a compliant manner, without resubmitting information.

Their technology today can verify a company’s credentials and then enhance that company’s profile with the “TrueBiz Risk Score” which is based on over 50 data points from variety of public and private sources. This enhanced profile is arguably one of the most sophisticated views on the risk potential of a business and could help highlight key accounts that could be expedited.

We are still in the early innings of building a modern API-driven KYB infrastructure that powers both financial and non-financing services for businesses of all sizes. Our conviction is that Danny and Max will make TrueBiz one of the key solutions of that future infrastructure.