HelloFlow, a Danish fintech startup, has closed an approx. €1.3 million seed round led by PreSeed Ventures and Seedcamp.
Founded in 2020, HelloFlow is revolutionizing client onboarding and identity verification in the financial industry with a no-code platform, which integrates with ID authentication services in local markets. Mikkel Skarnager, the Co-Founder and CEO of HelloFlow, explains: “Using the platform, you can set up a proper, sleek, and compliant onboarding process and share it with the clients, all inside a single day. This makes it possible to launch your service in new markets across the world within 10 minutes”.
There is an increasing focus on anti-money laundering (AML) processes in the financial industry, not least due to a series of international scandals and fines against financial institutions reaching $10.4 billion (around €8.7 billion) in 2020. Consequently the regulatory requirements and compliance standards for onboarding new clients to banks, investment and trading platforms, crypto broker services, sports betting sites and alike have exploded.
Financial businesses are therefore under pressure to find new onboarding solutions. The startup also states that 45% of clients are likely to abandon onboarding application forms due to bad customer experience, and additionally recent study shows that financial institutions may reduce 80-90% of operational costs by digitalizing their onboarding setup.
While financial institutions fully recognize these issues as well as opportunities to optimize, the startup states that such bodies struggle to find solutions on the current market, as available international services are cost-intensive and have low conversion rates, whereas the more effective process of integrating with local regulatory services takes months (at best) of developing customized IT systems as almost every country has their own solution (like NemID, BankID, MyInfo, BeID, etc.).
Being in charge of building a bespoke onboarding and customer identity verification (KYC) setup for the Danish bank and trading platform Saxo Bank was what led founder & CEO Mikkel Skarnager to his vision of HelloFlow – a low-barrier solution with to digitalization for all financial businesses regardless of size, market or resources. Mikkel Skarnager explained that “After having spent 2 years building a setup for Saxo Bank it became obvious that doing the same thing all over again at other institutions simply wouldn’t make sense. I wanted a completely new way of thinking about such setups, hence hope to do for financial institutions no less than what Webflow does for web design, but with a focus on KYC and AML compliance”.
Previous to his career at Saxo Bank, Mikkel worked ‘on the other side of the table’ with developing the ID authentication service NemID for Nets Group. So did his co-founder and CTO at HelloFlow Ciprian Florescu, who therefore have in-depth knowledge of how regulatory services are built.
And the two founders’ experience is what has especially impressed Alexander Viterbo-Horten Investment Director at PreSeed Ventures prior to investing in HelloFlow: “I and our entire team at PreSeed Ventures have been impressed by Mikkel and Ciprian from the first meeting. There is not only a very strong founder market fit due to their relevant experience, especially with Mikkel’s insight from building a bespoke solution for Saxo Bank, but as a team, they move with an incredible speed and continue to prove a high level of execution skill”.
About the new investment Tom Wilson, Partner at Seedcamp, commented: “HelloFlow’s plug and play solution is a real game-changer for client onboarding, allowing companies to set up processes quickly without the need for custom code. We’re delighted to have the opportunity to work with Mikkel and Ciprian and support them in helping companies say goodbye to slow client onboarding.”
With the new capital, HelloFlow plans to accelerate its product development to expand the progressive functionalities of the platform. Moreover, the company aims to expand beyond the financial industry by offering a complete onboarding solution for legal services and the accounting industries.
