Global companies are increasingly reliant on the services of on-demand contractors. They need to hire fast, but are often held up by background checking processes that are bureaucratic, slow and expensive to use.
So, disruptive technology that renders cumbersome processes obsolete will naturally attract the business of clients, and for the entrepreneurs behind the technology, the attention and the cash of heavyweight investors from the worlds of technology, HR and the sharing economy.
That is exactly what Onfido, a London-based background checking tech startup has just done, securing $4.5 million Series A funding, led by European venture fund Wellington Partners, investors in Spotify and DropBox.
Onfido’s technology allows the thousands of companies that make up the $26 billion sharing economy market to carry out global, remote verification on the workers that use their platforms.
It can run background checks on everything from identity checks to criminal and anti-money laundering checks, overhauling the cumbersome traditional paper-based process.
Onfido's founding team
The company was set up just over two years ago by young entrepreneurs Husayn Kassai, Eamon Jubbawy, and Ruhul Amin, after graduating from Oxford University.
The idea emerged when Jubbawy and Kassai joined the university's Oxford Entrepreneurs (OE) Society and became Vice President and President respectively.
“Membership of OE nurtured our entrepreneurial way of thinking,” says Jubbawy. “Then, when we were running the society, we spent a lot of time speaking to HR departments at large companies, asking about their pain points, and background checking was something that repeatedly came up.”
The pair teamed up with Amin to find a way of bringing technology and data aggregation into the background checking process that would improve the turnaround times and quality of data, and make it more affordable to companies.
Onfido was launched in 2012 using seed funding from Oxford University, Saïd Business School and swiftly followed by investment from high profile investors, including former
“Investing in Onfido was a no brainer,” says Cobley. “The founders are wise beyond their years and have identified a massively growing market and come up with a brilliantly executed solution.
“There are always risks when you invest in a business, and while statistically the risks might be slightly higher with young founders, these guys are not your average young founders; they are top tier.”
What surprised everyone was the lack of market competition. Other than the likes of HireRight and Sterling BackCheck in the US, says Jubbawy, Onfido has managed to forge ahead of other emerging players in the arena.
They currently carry out their checks in 28 countries across Europe and the plan is to be in 35 countries by the end of the year.
And in spite of their youth and inexperience, their achievements helped secure their latest round of funding.
Jubbawy says: “We were confident that we had a good product and hoped that investors would judge us on that rather than our age. Having examined our technology, they could see that it was more sophisticated than our competitors’, and the fact that we had over 400 clients also gave them confidence to invest.”
Dan Cobley is no stranger to the idea of youth being no barrier to business success.
He says: "I spent eight years with Google, which was founded by Larry and Sergey when they were barely over 20. Mark Zuckerberg founded Facebook when he was just 19. What’s great is how much young people now see starting a company as the cool, desirable thing to do when they leave university. People who a decade ago might have wanted to work for a consultancy or a bank are now looking to start something. And having role models like the founders of Google, Facebook, Twitter and Snapchat can only help.”
And like any good investor, Cobley has committed much more than just cash.
“We have skills, experience, contacts, and learnings from past mistakes that can be invaluable to a young business, and we’ll do our best to share them," he says. "I’m sure they will make mistakes and will need a helping hand at times, but that’s not unique to companies with young leaders. I’m involved with companies with much more mature leaders, and they also make mistakes and need help. That’s what we are there for.”
With major clients like Homejoy and recruitment firm Hays on their books, Onfido will use its latest investment to further penetrate the US market and expand into other European countries later this year.
“A few other companies have recently launched with the intention of replicating the way we’ve introduced technology into the background checking industry,” says Jubbawy. “The space is undergoing massive disruption and we’re thrilled to be the ones leading the charge.”
