India, the world's most populous country and the second largest internet market after China, is becoming increasingly digital. However, this rapid digitization has increased the risk of online fraud.
Cyber fraud is on the rise in India, with the Indian government estimating that cyber fraud could reach 0.7% of gross domestic product (GDP) (more than $14 billion) within the next year. Even government-backed systems, including Aadhaar, are sometimes targeted by malicious actors.
New Delhi continues to introduce new regulatory requirements to limit fraudulent digital transactions. Nevertheless, these updates often place a burden on businesses to update their technology regularly. Efforts to eradicate digital fraud can be confusing. For example, a recent crackdown on the fraudulent use of permanent account numbers led to trading disruptions on some fintech platforms.
Hyderabad-based startup Equal aims to address all of this with its suite of identity verification and financial data sharing products.
The two-year-old startup helps businesses streamline know-your-customer (KYC) requirements, fraud prevention, and regulatory compliance by integrating over 50 identity databases and thousands of API providers. The startup recently acquired an undisclosed stake in account aggregator OneMoney and combined its identity verification services with OneMoney's consent-based financial data sharing.
“Data sharing remains a big issue in this country when it is not done digitally with consent,” Keshav Reddy, son of GVK Group Vice Chairman GV Sanjay Reddy, told TechCrunch.
Reddy founded Equal with former Swiggy engineering director Rajeev Ranjan after returning to India from the US.
Over the past two years, Reddy launched Equal himself and the startup has added over 350 customers including State Bank of India, HDFC Bank, ICICI Bank, Reliance Jio, Airtel, Uber, and Zoom.
The startup has now raised a $10 million Series A round (at a post-mortem valuation of $80 million) to expand its business, expand its product portfolio, and forge strategic partnerships. The round was led by Prosus Ventures, Tomales Bay Capital and Reddy himself, with participation from other investors including Blume Ventures, DST Global, Gruhas VC and Quona VC.
Equal is not alone in this space, there are already players in the market such as Perfios (backed by Warburg Pincus and Teachers' Venture Growth), IDfy (backed by TransUnion), and Bureau (backed by GMO VenturePartners) . However, Reddy told TechCrunch that unlike its competitors, Equal acts as an aggregator, a partner that works with some of its competitors.
Ravi Kumar, co-founder and CEO of Upstox, who also invested in Equal's first round and is one of the identity verification and account aggregator's early customers, said his reasons for not using the trading platform are cost and uptime. told TechCrunch. See if you can build similar technology in-house.
Upstox has been using Equal for about a year and processes about 350,000 transactions each month. Previously, the platform relied on existing identity verification providers, Kumar said.
“Equal can aggregate many different APIs and guarantee very high uptime across all those different connections,” he said.