Andrey Sever is the co-founder and the CEO of Sumsub, which he started with his twin brothers, Jacob and Peter, in 2015. Andrey sets the company’s strategy and operations and drives Sumsub’s mission to create a world without money laundering and digital fraud. Originally from Israel, Andrey graduated from St. Petersburg State University, where he received a degree in theoretical physics.
In an exclusive interview with AsiaTechDaily, Andrey says:
Winston Churchill is often quoted, but there is a fantastic line that I believe we should all live by in the business world. “We make a living by what we get. We make a life by what we give.” No matter what you do, it is important to look after the man to your left and the woman to your right. Give. From the start, our solution has aimed to help people, which gives us a kind of unparalleled satisfaction.
Focus on making life better by giving people what they need.
The biggest fundraising challenges fundraising related to deal terms. These terms should never limit your company’s work and should always be mutually beneficial. Another problem we face is finding investors that can support our business culture. You see, for the collaboration to be effective—you have to like one another.
Read on to know more about Andrey Sever and his journey.
Please tell me about your personal background and What motivated you to get started with your company?
Andrey Sever: Before we started Sumsub, my twin brothers and I worked on a slightly different project. We were developing software that would recognize alterations made by graphic editors. As it turned out, this would be quite a useful instrument later on.
We started by applying it to cases of insurance fraud. It turned out to be quite a common trick; fraudsters would purchase a car in pristine condition and then file insurance claims by submitting photoshopped pictures of the car, faking damage that wasn’t there. Because the whole thing takes place online, insurance companies were unable to spot evidence fabrication. Ultimately, this became an easy way for fraudsters to make money.
Although we started by dipping into insurance fraud, similar cases were emerging in all sorts of industries. So, we went on exploring. Where else could we put our solution to use? At some point, our partners connected us with several police agencies, and we were suddenly involved in assisting police investigations. So, we were providing the police with different levels of forensic help; the peak of it was probably the time when we got to expose fake satellite images! Thus, the solution gained a lot of attention from police agencies from all over the place. We were, of course, happy to jump on the opportunity and catch even more bad guys.
Slowly, we realized that all of the larger projects were connected with governmental organizations, and we didn’t want to take that path. We wanted to grow and pass exciting milestones rapidly, but it wasn’t possible to do so through such complicated, stiff, slowly changing governmental institutions. So, we ventured off into the modern corporate world.
Right around that time, my good friends over at Cryptopay were pressed to develop their compliance processes and protect themselves from fraud, which was a persistent problem for their crypto wallet. As it happened, they offered a task to us—we had to build a solution for them based on our software that worked by recognizing graphic editors.
We took the opportunity, added the necessary functionalities, such as face match, AML data, and other enriching features, and ended up creating a well-performing solution. It was so good that four other companies we knew in the industry adopted our solution shortly after.
The timing served us well, you see. Around that time, the car-sharing industry started blowing up worldwide, and they had big issues with fraud, especially in Eastern Europe. Because of that, more industries reached out to us for verification, anti-fraud, and compliance. We started working with Blockchain and had some projects in Asia, such as South Korean BlueWhale. We started expanding from Europe to Asia and then worldwide.
What is your current main product, and can you share any previous product pivot story to the current product?
Andrey Sever: What started as a basic frame for identity verification became a powerful system, often referred to as a verification cockpit. It’s the ultimate tool for managing everything with the help of a simple dashboard, without any tech wizards.
In addition to the support and legal teams’ members, compliance officers can set up the checks they need—whether that’s KYB, KYC, transaction monitoring, etc. Not only this, but Sumsub’s solution allows users to construct the steps of every journey, adjust them for different user groups, change the look and feel, and perform A/B testing; it is all there. This is exactly how we gained a competitive edge within the market.
How much money have you raised in total so far? When was the recent funding round?
Andrey Sever: Well, our funding totals at around $7M. Our seed round was led by Flint Capital and Ilia Perekopsky, the VP of Telegram. Although we can’t disclose the exact sum, we could say it was somewhat close to $1M.
More recently, we raised $6M via an A Series round led by MetaQuotes, the leading financial trading software developer.
What were the internal decision processes in determining when to begin fundraising, and what were the logistics for this? And how many investors have you met so far, and how did you meet these investors, and which channels worked best for you?
Andrey Sever: Well, as with any other business, our fundraising is tied to our expansion plans. Once we’ve cemented an idea, we begin estimating our burn rates. If we see that our funds are not enough to cover our future developments, we start looking for support.
The way we fundraise is mainly through networking. Some of our prospective investors came to us because they heard our name in a recommendation or stumbled across an article about us on the internet. We’re also able to discover potential investors through mutual colleagues and chase them ourselves.
We’ve been fortunate enough to connect with investors from South Korea as well.
What are the biggest challenges and obstacles that you have faced in the process of fundraising? If you had to start over, what would you do differently?
Andrey Sever: The biggest fundraising challenges fundraising related to deal terms. These terms should never limit your company’s work and should always be mutually beneficial. Another problem we face is finding investors that can support our business culture. You see, for the collaboration to be effective—you have to like one another.
What are your milestones for the next round? And what are your goals for the future?
Andrey Sever: We are generally satisfied with the pace of our growth and our product’s quality, but we still have greater targets to hit. We are looking forward to expanding into the Americas, hopefully growing the percent of operations in those regions to 40%. Not only in terms of sales, but rather in establishing ourselves in the communities, getting to know the market, potentially recruiting new team members, and finding promising investors. This would take the globalization of our company to the next level.
Following that, we have big plans for employment and look forward to welcoming many new team members.
How have you attracted users, and with what strategy have you grown your company from the start to now?
Andrey Sever: Well, firstly, we’re a B2B company, so our driving power is always going to be our expertise.
We focus immensely on content projects, making sure that we are reaching the right audience. Attaining real results and demonstrating our extensive understanding of compliance and anti-fraud works perfectly for attracting the relevant audience—those who like our approach and want to incorporate it into their business.
Frankly, we’re still applying the same methods and tools that we’ve been using for years. The only difference is that we’re participating in more offline events for obvious reasons; everything is moving digital.
Which has been the best marketing software tool for the growth of your startup, and why?
Andrey Sever: I hope that this doesn’t sound cliche, but in terms of the tools that helped us the most, Google Analytics, Google Search Console, and Google Data Studio have been invaluable. There are many marketing tools out there, and we’ve tested quite a lot of them. We use some too, but the Google tools have proven to be the most impactful. After all, Google is the main search engine of the entire world, and the majority of our audience uses it.
By the way, we’ve just started testing Naver we’re now looking to implement it into our marketing strategy. There’s still a lot we can do, moving forward!
What do most startups get wrong about marketing in general?
Andrey Sever: Not counting your expenses—this would probably be the most frequent mistake businesses make. Companies get on with the work, not knowing the cost of their client acquisition, and it is reckless. At some point, they realize that a client costs them more than it pays.
How do you plan to expand globally?
Andrey Sever: I would say that we’re very well represented in our domestic regions, Israel and the UK, although we have quite many clients in the States, Australia, New Zealand, Singapore, Hong Kong, and South Korea. We are already somewhat global, but it would be great to further consolidate our already existing presence in the Americas and Asia.
What are the most common mistakes companies make with global expansion?
Andrey Sever: It’s hard to say as I can only answer from my personal experience. Our business started in the right place, at the right time, with the demand in place, creating a space for us on the market. We encountered no roadblocks on the way to global expansion.
How do you handle this COVID-19 outbreak situation for your company’s survival in the future?
Andrey Sever: COVID-19 didn’t affect us as much, despite the noticeable drop in demand at the start of the pandemic. We were affected the most by the transportation industry’s temporary closure; we have several clients who work in that industry, including Uber. So, we were going to feel the down curve, and we did. Having said this, shortly after the initial blow of the pandemic, several financial companies came to adopt our solution; the growth was simply explosive. In August 2020, we observed a growth of 300% when compared to August 2019. The number of checks increased by 600%.
COVID-19 pushed more businesses online. In doing so, it expanded our potential client base, and we started operating in new industries, such as education.
What’s the best advice you’ve ever received? What advice do you have for someone interested in doing similar things like yours or in a similar direction?
Andrey Sever: Winston Churchill is often quoted, but there is a fantastic line that I believe we should all live by in the business world. “We make a living by what we get. We make a life by what we give.” No matter what you do, it is important to look after the man to your left and the woman to your right. Give. From the start, our solution has aimed to help people, which gives us a kind of unparalleled satisfaction.
Focus on making life better by giving people what they need.
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