Launched in 2019 by Liudas Kanapienis and Andrej Vistorskij, Lithuanian startup Ondato streamlines KYC, KYB and AML-related processes. It provides solutions for digital identity verification, business customer onboarding, data validation, fraud detection, and more. To date, it has offices in the UK, Lithuania, and Poland and over 300 clients globally. Ondato has already raised €6.6 million, including a $2 million seed round led by OTB Ventures.
In the Startup of the Day column, founder and CEO at Ondato Liudas Kanapienis shares details about the startup’s idea, its product, and future plans.
The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.
Tell us about your startup. How does it work?
Ondato is a tech company that streamlines KYC, KYB and AML-related processes. Our solution is an operating system if you will, that can solve all KYC needs in one place. We are HQed in the UK, but were born in Lithuania and retain strong Lithuanian roots.
To expand on our solution, Ondato provides technological solutions such as digital identity verification, business customer onboarding, data validation, authentication, and more. These provide the highest standard available of online- or offline-KYC on-boarding for all business and customer types done from a single interface. Ondato is turning compliance into a business benefit for its customers, helping to create a better and safer environment for organisations and individuals.
We help businesses focus on their main activities without worrying about identity theft or regulatory compliance managing new or existing clients’ data. On the other hand, Ondato helps end-consumers to get product access anywhere, anytime, securely.
We’re using state-of-the-art machine learning that analyses cross-checks any received information with local and international registries within milliseconds.
How did you come up with the startup’s idea? What was the reason/motivation behind it?
Organisations of all kinds, especially financial institutions, need to know who they’re working with. It’s better for business, and many jurisdictions demand it. Today’s identity verification and “know your customer” (KYC) tools are time-consuming, difficult to use and inefficient — financial institutions have paid over$10 billion in regulatory fines over the past year for KYC violations, and fraud has increased by 252% since 2019.
We decided to create a better, more complete solution than what existed in the market, centred on our vision to turn compliance from a hassle into a business benefit. So we built a skilled team to develop a compliance solution for financial institutions – and other organisations – that is faster, simpler and more effective than the status quo.
I realised that by combining my knowledge in payments and retail I could lead a team and develop a solution that would benefit the KYC and verification industries. That’s how we started Ondato. We saw the need to streamline KYC and AML processes because we experienced how supervisory requirements were getting more and more complicated.
It was really difficult to follow everything and mistakes were happening to companies across finance and beyond, despite their increased hiring in compliance. That’s when we understood the need to onboard clients quickly and efficiently will be an ever-growing pain point for financial institutions. Because we had the right experience and know-how, we decided to create a suite that would offer solutions for financial institutions and any other business that needs to verify the identities of its customers.
In 2018, we started developing unique and resilient solutions that helped our customers focus on their businesses, while Ondato took complete care of all the KYC and AML processes. This became our central idea and we have been developing and expanding it ever since.
How long did it take to reach the prototype or MVP? What did you encounter?
We started developing the MVP in 2018, and at the beginning of 2019 we launched one of our first services — automated identity verification. Over time, we developed new solutions for KYC and AML processes and refined existing ones. This year, we launched Ondato OS, a solution akin to a compliance operating system that brings our modules together and covers the entire customer lifecycle process.
For us, the main challenges were always time and speed. Our product quite rapidly found its niche in the market. Once we were on the map, the demand skyrocketed, which also meant that we had to find balance between the quality of new features and their timely delivery to ensure that a smooth client experience. We released over 50 features and ten new products within a year. This, while expanding to new markets, and hiring for further startup growth.
When exactly did you launch your product? Or when the launch is planned?
We launched in 2019.
Tell us about the stratup’s business model. How do you monetize your product?
The pricing depends on the needs and usage of the company. Typically, plans charge per verification, with different plans including or excluding additional features and platform seats.
Ondato uses micro-modular architecture, making it a customizable and scalable product that fits any enterprise across the globe, fintech or not. Ondato can be viewed as a pile of Lego blocks that can be mixed and matched to find unique solutions to the problems, regardless of process complexity or regulatory changes.
What are your target markets and consumers?
Our main clients are financial institutions: banks, fintech, insurance companies, investment platforms and other companies that provide their services in cyberspace. We are now actively expanding in Europe, with particular focus on growing the business in Germany, France and Spain next.
If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.
To date, the company has raised €6.6 million and has operations globally. Today, Ondato is one of the leading KYC and AML platforms in Europe and works with over 300 clients globally. We are actively expanding into new regions and deepening our footprint in others. The company has offices in the United Kingdom, Lithuania, and Poland. Ondato has won several awards, including being named “Fintech of The Year” by the German-Lithuanian Business Awards, and continues to grow rapidly.
What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.
Ondato has 192 employees.
Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.
To date, the company has raised €6.6M. Ondato has started its operations with a grant investment, followed by 3 pre-seed and 2 seed rounds involving 6 investors.
What’s next? Tell us about your future plans.
One of our future plans is to explore and strengthen the risk-flexibility of our platform. This means that depending on your client, you need to gather a different scope of information depending on a number of different risk factors. For example, the data you gather for the economy-sharing service will be different from the data you have to gather for a bank, as a bank will require a deeper level of insight.
With Ondato OS, we can offer better flexibility for the customers (they provide only the necessary data meaning that they spend less time with arbitrary forms). It’s also easier for businesses as they can manage customer data from client cards and adapt their approach to better suit their business case. In essence, it’s a smarter way to approach KYC procedures that guarantees safety and flexibility. In fact, the OS consolidates, updates and streamlines Ondato’s end-to-end compliance suite within a single platform. Each individual service has been upgraded and integrated into a new, holistic ‘compliance CRM’ that provides online financial players with an unprecedented level of clarity about new and existing customers, including those imported into Ondato from legacy compliance systems. This is the path that we are continuously developing.
