Truora, a Colombian user authentication startup, has raised $15 million in Series A funding co-led by two Silicon Valley-based venture firms.
Propel Venture Partners and Accel led the investment for Truora, which valued the company at $75 million post-money.
Founded in August 2018, Truora was originally focused on background checks for gigster platforms. In 2018 and 2019, its biggest customers were ride-hailing companies, and with the pandemic, the company saw an increase in e-commerce and marketplace customers.
Truora participated in Y Combinator’s Winter 2019 cohort and soon after expanded into digital identity and authentication technologies. That March, it raised $3.5 million in a seed round co-led by Accel and Kaszek at a $15 million valuation.
Today, Truora describes itself as a SaaS startup that builds authentication and communication tools for Latin American startups, marketplaces, fintechs and banks. It specializes in user authentication and onboarding, mainly through WhatsApp.
Its technology includes automated onboarding with features such as automated chatbot conversations, facial recognition, document verification and background checks. In 2021, Truora launched its WhatsApp-focused Truconnect product in an effort to help companies connect, and verify users, via a more accessible channel.
“We allow businesses to increase user acquisition, reduce onboarding dropoff, provide 360 customer support and even sell their services, with minimum tech requirements from their end,” said co-founder and Maite Muniz, who serves as the startup’s chief product officer and is a former McKinsey consultant.
Today, Truora has over 400 clients in nine countries across Latin America. Those customers include Rappi, Clara, Bancolombia, Adelantos, Mercado Libre, Didi, Homie and Global 66. It says it averages 400,000 to 500,000 validations and background checks monthly and has annual recurring revenue of over $4 million with expectations to grow by “over 5x in the next year.”
Co-founder and CTO David Cuadrado spent nearly five years as an engineer at Twilio, while co-founder Cesar Pino worked as an engineer at the company for nearly three years.
The company has offices in Colombia, Mexico, Brazil, Chile, Peru and San Francisco. While its headquarters are located in Cali, Colombia, Muniz said Truora’s new main focus, or highest growing office, is Mexico City. In fact, the startup plans to use its proceeds in part to expand its WhatsApp onboarding offering, which includes functionalities such as automated conversations, in Mexico. Eventually, it also wants to expand further in Brazil.
CEO and co-founder Daniel Bilbao says Truora aims to lower the barrier to entry by making its products available to companies with limited tech resources. He said Truora can integrate into any of a company’s products in “less than two weeks.” Its most popular channel, WhatsApp, takes less than a day to integrate with a no-code flow builder, according to Bilbao.
WhatsApp is very commonly used across Latin America by an estimated 80% to 90% of the population.
“By making the integration of Truora’s authentication products into WhatsApp possible, the company is opening a potential addressable market in LatAm of $3.5 billion,” said Bilboa, a former investment banker at Bank of America.
Truora also plans to use its fresh capital to do some hiring and insists that it wants to create a workplace culture “where women can thrive.” Today, 70% of the company’s leadership team are women and 45% of its staff are women. It says its goal is to reach 50% of equal representation with more than 50 new jobs “with a special focus on women talent for product and engineering.”
Notably, dozens of angel investors also put money in Truora’s latest financing, including Rappi CEO Simon Borrero, Deel CEO Alex Bouaziz, Muni founder Maria Echeverri Gomez, Jeeves CEO and founder Dileep Thazhmon, Bitsports founder Tatiana Fontalvo, Morado founder Angela Borrero, VaaS founder Valentina Valencia, Searchlight’s Anna and Kerry Wang, GGV Capital venture partner and ex-Affirm COO Huey Lin and Latitud co-founder Brian Requarth.
Naturally, Truora’s investors are bullish on the company’s potential. Accel’s Rich Wong said he was attracted to a group of founders that was composed of a technical team that was former Twilio paired with great product and biz dev founders.
“It was the combination of the team that was at the core,” he said. “We had also seen the success of this type of business in companies such as Checkr so there was a direct analogy there as well.”
Wong also believed that it was logical that a regional/local provider would “be the first to understand the cultural differences and local issues, and tune a product to those needs.”
“For example, while WhatsApp is common in many emerging economies, it’s LESS of a priority in the minds of most Silicon Valley-based entrepreneurs,” he added. “So the team’s insight to focus on the use case is a good example of being in touch with the regional needs.”
Propel Ventures Partner David Mort said he’s known Bilbao for five years and “jumped at the opportunity” to back him and the team he had put together.
“While the authentication and KYC products are highly competitive the key differentiators for Truora lies in how the technology is delivered,” he said. “Truora is providing their capabilities to the financial sector in WhatsApp, targeting a segment of the population that was hard for fintechs to reach, we see a lot of potential in this model.”