STOCKHOLM – HelloFlow, a Danish FinTech startup, has closed a $1.6m Seed round led by a Danish VC PreSeed Ventures, and UK-based, Seedcamp. The company revolutionizes client onboarding and identity verification in the financial industry with a no-code platform, that integrates with ID authentication services in local markets.
“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” – explains Mikkel Skarnager, the Co-Founder and CEO of HelloFlow.
With 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 in 20201, the regulatory requirements and compliance standards for onboarding new clients to banks, investment & trading platforms, crypto broker services, sports betting sites and alike have exploded.
With their digital no-code onboarding platform HelloFlow, therefore, taps into a rapidly growing market estimated to €1 billion at the time being.
Combined with new expectations from clients demanding the process of starting to use a service to be digital, seamless, and quick, financial businesses are under pressure to find new onboarding solutions. Not only are 45%2 of clients likely to abandon the application form as it provides a bad customer experience, but a recent study shows that financial institutions may reduce 80-90% of operational costs3 by digitalizing their onboarding setup.
While financial institutions fully recognize these issues as well as opportunities to optimize, they struggle to find solutions on the current market, as available international services like Onfido or Dow Jones 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.).
Exactly 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 HelloFlow’s founder and CEO Mikkel Skarnager to his vision of creating a solution with low barriers to digitalization for all financial businesses regardless of size, market or resources.
1 Source: https://www.complianceweek.com/surveys-and-benchmarking/report-fines-against-financial-institutions-hit-104b-in-2020/29869.article
2 Source: https://onfido.com/resources/reports-whitepapers/the-identity-experience-how-identity-creates-great-ux
3 Source: https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/Digital%20identification%20A%20key%20to%20inclusive%20growth/MGI-Digital-identification-Report.ashx
Mikkel Skarnager explains 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”.
PreSeed Ventures have in the company of Seedcamp invested $1.6m in HelloFlow. Previously the two have also co-invested in Danish startups like Pento or Dreamdata.
About the new investment Tom Wilson, Partner at Seedcamp, comments: “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 at expanding beyond the financial industry by offering a complete onboarding solution for legal services and the accounting industries.
HelloFlow was founded in 2020 by Mikkel Skarnager, who previously led Digital Transformation at Saxo Bank, and Ciprian Florescu, a former senior developer from Nets Group, who decided to use their broad experience in client onboarding and financial software development to create a critical financial solution. Their vision was to disrupt traditional client onboarding by providing a digital onboarding solution with low barriers to digitalization – hence a no-code platform that not only removes the time-consuming coding part but also development-related costs. Now, HelloFlow goes beyond the financial industry offering its solution to a wide range of companies across different industries.
About PreSeed Ventures
For more than two decades PreSeed Ventures have scouted, mentored, and funded Danish success stories like Vivino, Trustpilot, and Lunar. They have ventured into the future alongside more than 400 founders ranging from the brilliant to the slightly mad and supported their personal, collective, and professional growth. It is fair to say PreSeed Ventures is among the most notable early-stage investor in the Danish tech community, which today is thriving more than ever.
Seedcamp is Europe’s seed fund, identifying and investing early in world-class founders attacking large, global markets and solving real problems using technology. The Seedcamp Nation includes over 390 startups building breakout businesses that change the way people live, interact and buy and includes publicly listed UiPath, and unicorns Wise, Revolut, Hopin, and wefox along with fast-growing businesses such as Sorare, Pleo, Grover, Viz.ai and Ezra.
Seedcamp fast-tracks a founder’s vision and creates value through immediate access to smart capital, a lifelong community of support, and a global network built upon more than a decade’s experience backing exceptional talent.