A Maryland startup is merging with an East African company to expand its background check business.
Prembly, founded by Johns Hopkins University alumnus Lanre Ogungbe, merged with Kenyan background check firm Peleza earlier this month. The combined staff of 91 people — 38 from Peleza and 53 from Prembly — will do business as Prembly Group. Ogungbe believes the merger will help his firm expand into the East African market to cover more of the African continent. The financial terms of the deal were not disclosed.
The background check and financial compliance company already has a large customer base of banks and other financial firms doing business in Africa. Prembly completes around 2 million identify verifications every month across multiple countries, Ogungbe said. Prembly has raised $3.3 million since its commercial launch in 2021, but is currently looking for more investment after the merger.
The market for the Maryland startup grew massively during the pandemic. Online banking expanded in Africa when many in-person businesses shut down, leading to a booming financial technology sector. Many people in Africa do not have a driver's license or other form of government identification, so it can be difficult for African banks or insurance companies to verify someone’s identity, especially as after they started offering more online services.
"In Africa and most emerging markets, if you do not have a car, there's really no reason why you should have a driver's license," Ogungbe said. "If you're not traveling, why should you have an international passport? In that market it's quite difficult to identify people."
Prembly is a remote company with staff in Maryland, the United Kingdom, Ireland and Canada. The firm had an office in Baltimore but moved to Bethesda to be more accessible to staff in Washington, D.C., around two months ago. Ogungbe still lives in Baltimore.
Prembly uses alternative documents, like tax records or phone numbers, to verify someone’s identity so they can quickly open a bank account or verify that their business is legitimate. The firm also uses facial recognition technology and other biometric data. Prembly’s ability to better identify Black faces than much of the industry, since AI often struggles to recognize Black skin, has helped the firm expand to more clients based United States as well. Prembly clients include some of the most notable names in finance, such as the London Stock Exchange, MasterCard and consumer goods company Unilever.
Ogungbe believes the need for background checks and financial verification is also important as the number of African immigrants continues to grow, many of whom send or transfer money back to relatives in their native countries. The U.S. banking system needs to verify that these transfers by immigrants to their families are legitimate, not a form of identity theft, embezzlement, or way to fund an illegal organization, Ogungbe said. Prembly can step in with software that helps businesses avoid being associated with financial crime by monitoring transactions to identify possible fraud. The company is also working to develop a way to identify fake documents created by artificial intelligence programs, Ogungbe said.
"Everything's tied to data," Ogungbe said. "We pride ourselves as being the company that is using data to stop fraud and the company that is using data to increase financial security."
The firm is not the only Maryland company interested in the potential in emerging markets. Columbia venture capital firm AfriGloCal had plans in early 2023 to raise $5 million to invest in startups from West Africa, focusing on the finance industry. Baltimore accelerator Conscious Venture Lab has a partnership with one of the largest private universities in Latin American to teach “conscious capitalism.”
