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Online fraud and identity theft is a global problem. In Brazil, in particular, it鈥檚 estimated that those types of crimes cost the country about $15 billion a year. In fact, Brazil is ranked second in the world in terms of the number of online fraud and identity theft infractions. And, the country is home to one fraud attempt every 16 seconds.

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Besides being a problem for its citizens, the issue also can negatively impact the country鈥檚 economic relationships with other countries, that may hesitate to do business there.

In an attempt to tackle this problem head on, and started in mid-2016. Sao Paulo-based idwall started as an automated background check solution and has since grown into a suite of data and identity validation products.

Now the company has raised $10 million in a Series B round led by San Diego-based . , , , co-founder , and 鈥檚 . Globo Group, one of the largest media conglomerates in Latin America, also participated in the financing.

The round brings idwall鈥檚 since its inception to $16.5 million, according to 附近上门 data. It also marks Qualcomm鈥檚 AI fund鈥檚 first investment in a Latin American company. Silicon Valley-based also previously backed the startup.

How It Works

Idwall uses machine learning and AI to to help companies 鈥渂uild a seamless digital onboarding process鈥� via its face match, background check and automated optical character recognition (OCR) offerings.

The company said its APIs verify personal documents and information by searching in public and private databases 鈥渜uickly and pursuant to the compliance rules.鈥� idwall does all this by first validating that an ID is authentic. Then it works to ensure the person using it is actually the owner of the ID. And lastly, it runs a full background check. It claims it does all this in less than three minutes.

The company points to the fact that , a Brazilian car-sharing company, lowered its car theft rate due to identity fraud to zero by using idwall鈥檚 platform as evidence of how its technology can be effective. Other customers include , , and , which combined have an estimated $4 billion in market value, the company noted. In three years, it鈥檚 grown to having more than 180 customers (including more than 100 fintech companies).

鈥淲e help them do all these onboarding processes in a safer, better and faster way,鈥� Ando said.

The Impact

Having worked to create a digital bank and a marketplace to rent construction equipment, idwall鈥檚 co-founders realized firsthand how businesses can be impacted by fraud.

鈥淔or example, people would basically create a fake construction company, rent $10 million worth of equipment and the next day, steal everything,鈥� Ando told me.

In a written statement, Qualcomm Senior Director said the company鈥檚 venture arm is eager to collaborate with idwall 鈥渙n ways they can leverage Qualcomm mobile platforms, with on-device AI processing, to make their solutions run faster and with greater efficiency.鈥�

For idwall, Qualcomm鈥檚 participation was an 鈥渋mportant validation鈥� of its technology, which was also recognized by .

In a , ONEVC General Partner outlined why his cross-border firm invested in idwall. For one, the company is going after 鈥渁 large and growing market,鈥� he wrote.

鈥淭he rise of fintechs, marketplaces, and gig-economy startups created a need for an automated background solution for companies, suppliers, and clients,鈥� Yoshimura continued.

Secondly, recent regulatory changes in Brazil had led to an increase in demand for idwall鈥檚 offerings.

Also, in general, both he and Ando noted how weary Brazilians are of having to show their IDs for routine events.

鈥淏razilians are tired of sharing their ID to enter every building, sending a photo of their credit cards so they can buy online tickets, taking selfies holding their documents during the onboarding processes on apps and sharing their tax returns,鈥� Yoshimura wrote.

Idwall helps with that via its 鈥淢euID鈥� solution, which stores in a single wallet all the documents necessary for the onboarding processes of fintechs, startups, office buildings, and other customers.

Looking ahead, Ando said the company plans to further expand its services by the end of 2020.

鈥淥ur goal is to create trusting relationships in the digital age, especially in Latin America, where it is such a big problem,鈥� he said.

In general, the Brazilian startup scene is heating up as more companies attract venture dollars from global investors. Earlier this week, we reported on , a fast-growing 17-month-old Brazilian mobility startup, raising a $30 million Series A led by .

In April, we did a deep dive look at how Latin America has 鈥渁rrived鈥� among global VCs. Brazil has been the largest recipient of venture funding in an increasingly hot investment climate in Latin America. Earlier this year, we reported that venture funding in the region鈥檚 largest country exploded in 2018 to $1.3 billion, representing nearly two-thirds of all venture money raised in Latin America as a whole last year, according to , the Association for Private Capital Investment in Latin America. That鈥檚 52 percent more than the $859 million invested Brazil in 2017, and a staggering 369 percent increase from the $279 million raised in 2016, as you can see in the chart below:

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