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Andrew North is the co-founder and CEO of Sumsub, which he co-founded with his twin brothers Jacob and Peter in 2015. Andrew defines the strategy and activities of the company and leads Sumsub’s mission to create a world free from money laundering and digital fraud. Andrei was born in Israel and graduated from St. Petersburg State University with a degree in theoretical physics.
In an exclusive interview with Andrew, he stated…
Winston Churchill is often quoted, but there is a fantastic phrase that we should all respect in business. We live with what we get. We create life through what we give. Whatever you do, it’s important that you take care of the man on the left and the woman on the right. Give me that. From the beginning, our decision was focused on helping people, which gives us unprecedented satisfaction.
It’s about making life better by giving people what they need.
The main difficulties in raising funds relate to the terms and conditions of the transactions. These conditions should never limit the work of your company and should always be to the benefit of both parties. Another challenge for us is to find investors who can support our corporate culture. You see, in order to work together effectively, you have to love each other.
Read on to learn more about Andrew North and his journey.
Tell me about your personal experience and why you started your business.
Andrew North: Before I started Sumsub, my twin brothers and I were working on a slightly different project. We have developed a software that enables us to detect changes by graphic editors. It turned out to be a very useful tool for the future.
We started applying it to cases of insurance fraud. It turned out to be a pretty common trick: The crooks bought a car in perfect condition and then filed claims by photoshopping photos of the car and falsifying damage that wasn’t there. Because everything happens on the Internet, the insurance companies could not see the falsification of evidence. After all, it has become an easy way for crooks to make money.
Although we initially tackled insurance fraud, similar cases have occurred in all sectors. So we continued the search. Where can we use our solution? At one point, our partners put us in contact with various police forces and we were suddenly involved in assisting police investigations. So we provided the police with various forensic tools; at the climax it was probably time to unlock the false satellite images! This decision has therefore received a great deal of attention from law enforcement agencies around the world. We were of course glad that we could use this opportunity to catch more bad guys.
Gradually we realised that all major projects involved government organisations, and we didn’t want to go down that road. We wanted to grow fast and take important steps, but we couldn’t do it through such complex, rigid and slow-moving government institutions. Let’s go to the modern world of business.
Around the same time, my good friends at Cryptopay were under pressure to develop their compliance processes and protect themselves against fraud, which was a constant problem for their encryption portfolio. They happened to give us a task – we had to build a solution based on our software, which worked on the recognition of graphic editors.
We made use of this feature, added the necessary functionality such as face matching, AML data and other rich features, and came up with a solution that works well. It was so good that four other companies we know in the sector quickly adopted our decision.
As you can see, time has helped us a lot. Around the same time, the car-pooling industry began to explode worldwide and fraud was a major problem, especially in Eastern Europe. As a result, more and more industries have turned to us for audit, fraud prevention and compliance. We started working with blockchain and had several projects in Asia, such as BlueWhale in South Korea. We started to expand from Europe to Asia and then to the whole world.
What is your current core product and can you tell an earlier story about your current core product?
Andrew North: What began as a basic framework for identity verification has evolved into a powerful system often referred to as a cockpit. It’s the perfect tool to control everything from a simple dashboard, without any technical assistant.
In addition to the members of the support and legal teams, the compliance officers can set up the necessary controls – whether it concerns KYB, KYC, tracking transactions, etc. And not just that: Sumsub’s solution allows users to create the stages of each journey, customize it for different user groups, change the look and feel and do an A/B test; it’s all there. This has given us a competitive advantage in the market.
How much money have you raised so far? When was the last financing cycle?
Andrew North: Our funding is about $7 million. Our roundtable discussion was led by Flint Capital and Ilya Perekopsky, vice president of Telegram. Although we cannot disclose the exact amount, we can say it was almost $1 million.
We recently raised $6 million as part of a Series A led by MetaQuotes, a leading developer of financial trading software.
Which internal decision-making processes determined the start of fundraising and what was its logistics? And how many investors did you meet, how did you meet them and which channels served you best?
Andrew North: Well, like any other company, our fundraising is linked to our expansion plans. As soon as we’ve cemented the idea, we’ll start assessing our burn rates. When we find that our funds are not sufficient to cover our future expenses, we look for help.
We mainly raise money through networking. Some of our potential investors came to us because they heard our name in a recommendation or came across an online article about us. We can also find potential investors through our colleagues and look for them ourselves.
We also had the opportunity to make contact with investors from South Korea.
What are the main challenges and obstacles you have encountered in fundraising? If you had to start over, what else would you do?
Andrew North: The main difficulties in raising funds relate to the terms and conditions of the transactions. These conditions should never limit the work of your company and should always be to the benefit of both parties. Another challenge for us is to find investors who can support our corporate culture. You see, in order to work together effectively, you have to love each other.
What are the milestones for the next cycle? And what are your goals for the future?
Andrew North: In general, we are satisfied with our growth rate and the quality of our products, but we have even higher goals. We look forward to expansion in the Americas and hope to increase the share of business in these regions to 40%. Not only in terms of income, but also in terms of establishment in the communities, knowledge of the market, potential attraction of new team members and the search for potential investors. This takes the globalisation of our company to a new level.
We have big plans for the job afterwards and are looking forward to meeting a lot of new team members.
How did you engage users and what strategy did you use to grow your business from start to finish?
Andrew North: First and foremost, we are a B2B company, so our driving force will always be our expertise.
We pay special attention to content projects and make sure we reach the right audience. Achieving concrete results and demonstrating our deep understanding of compliance and fraud prevention is ideal for reaching a relevant audience that likes our approach and wants to integrate it into their business.
To be honest, we still use the same methods and tools that we have been using for years. The only difference is that for obvious reasons we see more events offline; everything is digitally controlled.
Which software was the best marketing tool for the growth of your start-up and why?
Andrew North: I hope it’s not a cliché, but when it comes to the tools that helped us the most, Google Analytics, Google Search Console and Google Data Studio were invaluable. There are many marketing tools available, and we have tested some of them. We also use a few of them, but Google’s tools have proven most effective. After all, Google is the most important search engine in the world and the majority of our audience uses it.
By the way, we just started testing Naver, which we now want to integrate into our marketing strategy. There’s still a lot to do, to get ahead!
What do most start-ups have wrong with marketing in general?
Andrew North: Not counting costs is probably the most common business mistake. Companies continue to operate without knowing the acquisition costs of their customers, which is unwise. At some point they realize that the customer costs them more than they pay.
How do you plan to expand globally?
Andrew North: I would say that we are very well represented in our home regions of Israel and the United Kingdom, although we have a number of customers in the United States, Australia, New Zealand, Singapore, Hong Kong and South Korea. We are already fairly global, but it would be good to further strengthen our current presence in America and Asia.
What are the most common mistakes companies make in their global expansion?
Andrew North: It’s hard to say, because I can only answer from personal experience. Our company started in the right place, at the right time, with a demand that gave us a place in the market. We have encountered no obstacles on the road to global expansion.
How do you deal with the COWID 19 epidemic to ensure the survival of your business?
Andrew North: COVID-19 had less impact on us, despite a significant drop in demand at the beginning of the pandemic. We have been particularly affected by the temporary closure of the transport sector; we have several clients active in this sector, including Uber. So we wanted to feel the downside, and we did. However, several financial companies contacted us shortly after the outbreak of the pandemic; the growth was simply explosive. In August 2020 we saw an increase of 300% compared to August 2019. The number of inspections has increased by 600%.
COVID-19 has put more companies online. This has increased our potential customer base and we have started working in new industries, such as education.
What is the best advice you have ever received? What advice can you give to someone who wants to do things that resemble you or go in a similar direction?
Andrew North: Winston Churchill is often quoted, but there is a fantastic phrase that we should all respect in business. We live with what we get. We create life through what we give. Whatever you do, it’s important that you take care of the man on the left and the woman on the right. Give me that. From the beginning, our decision was focused on helping people, which gives us unprecedented satisfaction.
It’s about making life better by giving people what they need.
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