The one is not alone. CAF raises BRL 80 million for digital identity
- July 22, 2022
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Founder of Ethoca, a startup sold to Mastercard, Darryl Green takes over as CEO and leads series A in the Brazilian startup
When Canadian Darryl Green reached an agreement with Mastercard to sell Ethoca, an e-commerce fraud-fighting startup that already operates in 40 countries, he soon fulfilled the agreement with his Brazilian wife. With suitcase and gourd, he moved to São Paulo.
With the capital raised in the sale, Green became a venture capital investor. One of the first chosen — Mutual, a consumer credit fintech — reconnected it to anti-fraud technologies. At Mutual, Green met Leonardo Rebitte, an entrepreneur who was scrambling to find a way to verify customers’ digital identity without resorting to an overpriced or inefficient product. With no viable alternatives, the Brazilian decided to create his own solution at home.
The tool began to be used by a myriad of fintechs and originated Combat Fraud (CAF), a digital identity startup that has just raised BRL 80 million in a series A round led by Green and the founders of Ehoca (André Edelbrock and Trevor Clarke). The Canadian didn’t just stop at investment. At the invitation of Rebitte, also as CEO.
In addition to Green’s know-how, which made it easy to hire former employees who already knew him from Ethoca’s days, the Canadian’s presence helped attract a list of well-known investors, including Kevin Efrusy, James Peck (CEO of NielsenIQ) and Andrew Prozes, former president of legal data firm LexisNexis.
“If I have a person more prepared than me to be the CEO, it makes perfect sense to bring him in”, said the founder of CAF. To Pipeline, Green said that Rebitte is one of the best he has worked with in the commercial area, with an unusual attention to customer relationships. “Our job now is to scale globally,” said the CEO.
Headquartered in Venâncio Aires, Rio Grande do Sul, CAF is still concentrated in Brazil — where it serves clients such as Magazine Luiza, Nomad, Cora, iFood, Linker (digital bank sold to Omie) — but is already taking its first steps abroad , starting with the United Kingdom, Mexico, Canada and the United States.
The technology developed by CAF helps fintechs and verify the identity of customers when creating an account — it is the startup engine that is behind those screens that ask for selfies, videos and photos of the ID. Rebitte argues that his startup’s solution is much more flexible than competitors, offering an unparalleled level of customization.
But CAF is not in an uncompetitive market. A leader, unico is one of the richest startups and recently raised $100 million in a round that valued the unicorn at $2.6 billion. Another competitor is Idwall, an investee of funds such as Monashees, GGV, Qualcomm and ONEVC.
At a time of layoffs and difficult access to capital in the startup environment, CAF is going against the grain. With the capital raised, the startup will hire another 100 people, taking the team to more than 350. “Here, it’s ‘layon’”, says the CEO.
The CEO of CAF argues that the funds raised — a round that began to be sewn in December — are more than necessary to carry out the startup’s expansion plans in Brazil and abroad. The round, by the way, is an indication of the solo path that the startup wants to follow. Rebitte has already turned down two offers for the company (from a major retailer and an anti-fraud firm).
Source: Value Pipeline