Truoraa 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 from Truora, which valued the company at $75 million after payment.
Founded in August 2018, Truora originally focused on background checks for gigster platforms. In 2018 and 2019, its main clients were ride-sharing companies, and with the pandemic, the company saw an increase in e-commerce and market customers.
Truora participated in the Y Combinator Winter 2019 cohort and soon after expanded into digital identity and authentication technologies. That March, she raised $3.5 million in a seed round co-led by Accel and Kaszek at a $15 million valuation.
Today, Truora describes herself as a SaaS startup that builds authentication and communication tools for Latin American startups, markets, fintechs and banks. It specializes in user authentication and onboarding, primarily through WhatsApp.
Their technology includes automated onboarding with features like automated chatbot conversations, facial recognition, document verification, and background checks. In 2021, Truora launched its WhatsApp-centric app Truconnect product in an effort to help businesses connect and verify users through a more accessible channel.
“We enable businesses to increase user acquisition, reduce onboarding churn, provide 360 customer support, and even sell their services, with minimal technology requirements on their part,” said co-founder and Maite Munizwho serves as product director of the startup and was a consultant for McKinsey.
Today, Truora has more than 400 clients in nine countries in Latin America. Those clients include Rappi, Clara, Bancolombia, Adelantos, Mercado Libre, Didi, Homie and Global 66. He says he averages between 400,000 and 500,000 validations and background checks per month and has annual recurring revenue of more than $4 million with expectations of grow “more than 5 times in the next year.”
Co-founder and CTO David Cuadrado spent almost five years as an engineer at Twilio, while co-founder César Pino worked as an engineer at the company for almost three years.
The company has offices in Colombia, Mexico, Brazil, Chile, Peru and San Francisco. Although its headquarters are located in Cali, Colombia, Muñiz said that the new main focus, or fastest growing office, is Mexico City. In fact, the startup plans to use its profits in part to expand its WhatsApp onboarding offering, which includes features like automated conversations, in Mexico. Eventually, it also wants to expand further in Brazil.
CEO and co-founder Daniel Bilbao says that Truora aims to lower the barrier to entry by making its products available to companies with limited technological resources. He said Truora can be integrated into any of a company’s products in “less than two weeks.” His most popular channel, WhatsApp, takes less than a day to integrate with a no-code stream generator, according to Bilbao.
WhatsApp is widely used in Latin America by an estimated 80% to 90% of the population.
“By making it possible to integrate Truora’s authentication products into WhatsApp, the company is opening up a potential $3.5 billion market in Latin America,” said Bilboa, a former Bank of America investment banker.
Truora also plans to use her fresh capital to hire and insists she 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. She says her goal is to reach 50% equal representation with more than 50 new jobs “with a special focus on female product and engineering talent.”
Notably, dozens of angel investors also put money into Truora’s latest financing, including Rappi’s CEO. Simon Borrero, CEO of Deel, Alex Bouaziz, Founder of Muni, Maria Echeverri Gomez, CEO and Founder of Jeeves, Dileep Thazhmon, Founder of Bitsports, Tatiana Fontalvo, Founder of Morado, Angela Borrero, Founder of VaaS, Valentina Valencia, Anna de Searchlight and Kerry Wang, Venture Partner at GGV Capital and former Affirm Huey Lin, COO, and Brian Requarth, Co-Founder of Latitude.
Naturally, Truora’s investors are optimistic about the company’s potential. Accel’s Rich Wong said he was drawn to a founding group that was made up of a technical team that was ex-Twilio along with great business and product development founders.
“It was the team combination that was at the core,” he said. “We had also seen the success of this type of business in companies like Checkr, so there was a direct analogy as well.”
Wong also believed that it was logical that a regional/local supplier “would be the first to understand the cultural differencelocal problems, and adjust a product to those needs”.
“For example, while WhatsApp is common in many emerging economies, it is a LESS priority in the minds of most Silicon Valley entrepreneurs,” he added. “So the team’s vision to focus on the use case is a good example of staying in touch with regional needs.”
Propel Ventures partner David Mort said he has known Bilbao for five years and “jumped at the chance” to back him and the team he had put together.
“While the KYC and authentication products are highly competitive, the key differentiators for Truora lie in how the technology is delivered,” he said. “Truora is bringing its capabilities to the financial sector on WhatsApp, targeting a segment of the population that was hard to reach for fintechs, we see a lot of potential in this model.”