Originally published in SmartCompany and written by Dominic Powell on 15 February 2018 https://www.smartcompany.com.au/startupsmart/news-analysis/identity-verification-startup-everproof-closes-1-5-million-seed-round/
After completing a $1.5 million seed round, the founder of digital identity verification startup Everproof has warned founders and chief executives they should be ready to put their day-to-day involvement in their startup entirely on hold during a capital raise process.
Everproof chief executive Nathan Merzvinskis tells StartupSmart the fundraising process for his company’s seed round got underway in October last year but took a lot of energy from both him and his team.
“You’ve really got to have you team behind you because if you do lose steam you can burn out and fail to capitalise on any of your early momentum,” he says.
“Be ready to put your interaction with the company on hold, and put provisions in place so it can continue to grow even with the chief executive out of the picture.”
Everproof was founded in 2016 after Merzvinskis and fellow co-founders Hugh Krantz and Andreas Limberopoulos had the idea while at uni together, each working in jobs that required various accreditations and licenses.
“These were only ever issued as hard copies, and they kept getting lost, which I saw as creating friction points and unnecessary risk exposure for companies,” Merzvinskis says.
The three founders decided to build a digital solution for employees to enter in their accreditations, which then created a continuous profile for those employees to share with employers.
Originally focused on things like Working with Children checks, of which Everproof processes around 15,000 each week, and partnerships with organisations like Cricket Australia, the startup is now setting its sights on the financial services sector off the back of its recent capital raise.
Everproof’s $1.5 million seed round was led by Westpac-backed Australian venture capital firm Reinventure and contributed to by APAC region investment company Allectus Capital.
This is the first raise Everproof has completed from established investors, having previously completed a $100,000 “friends and family” pre-seed at the start of last year. Reinventure partner Kara Frederick said in a statement the firm is “particularly excited” about its investment in Everproof due to the strong founding team and the startup’s potential to address what Reinventure sees as a multibillion-dollar market opportunity.
US rollout and investment on the cards
Everproof now has its sights set on global markets, including the US, as Merzvinskis says the startup’s platform isn’t restricted by geographical locations. He believes the US’s vast databases of searchable licenses makes it a good fit.
He also believes the government’s recent review into open banking and recommendations made on the publicity of customer data shows a willingness from banks and regulators to collaborate to make a safer industry — something he’s hoping Everproof can get involved in.
“We’re using this funding to grow our team and product offering, and our users have given us some great ideas for new features which we’re keen to implement,” he says.
“At the end of 2018, I’d anticipate we’ll be rolling out in the US.”
Merzvinskis is also optimistic about the scale of Everproof’s future, with the company well placed in one of the fastest growing sectors in tech at the moment, he says.
“We have the opportunity to become the ubiquitous company globally for verified employee information,” he says.
While the company admits to having experienced some growing pains recently, Merzvinskis believes they’ve all been positive, saying something he’s learned across his founding journey is that startups “go much faster than you anticipate at times”.
The company successfully went through Blackbird Venture’s Startmate accelerator, which provided it with strong guidance from mentors and key advice on how to scale the company comfortably. The accelerator also provided the team with access to venture capitalists and completing the program at the end of last year allowed Everproof to go through the capital raising process during the quieter summer months, which Merzvinskis says he was grateful for.
Part of Merzvinskis’ recent five-week trip around Silicon Valley has been to talk to a number of US-based venture capital firms, and he says he foresees Everproof undertaking a Series A round backed by US VCs in 18-24 months.