Onfido returns £5m BCR cash

Identify verification start-up Onfido has returned a £5m award from the Banking Competition Remedies fund citing a renewed focus on its core business.

Onfido was awarded the money as part of the ‘pool E’ group alongside the likes of Virgin Money, ClearBank, Ebury Partners, MarketFinance,Funding Xchange,Codat,ezbob, Fractal Labs, Previse in August last year. 

As part of its winning bid, Onfido aimed to brings its tech offering to SMEs and it pledged to match the funding with £5.2m of its own cash as well as a number of other targets.

"Onfido has changed strategic direction to refocus efforts on their core identity verification business, rather than branching into Know Your Business (KYB) as set out in their original public commitments," a spokesperson for Onfido said. 

The £5m returned will be allocated to the Capability and Innovation Fund and held in trust until it is awarded in February.

The Banking Competition Remedies fund is a £775m pot of cash from Royal Bank of Scotland (RBS) following the UK bailout of the banking sector in 2008. It is independent of both RBS and the UK Government and is governed by an independent board of directors.

It is made up of £275m allocated to the incentivised Switching Scheme and £425m to banks and other firms such as Onfido to help increase competition in the SME banking market across five pools. 

Aidene Walsh, CIF Lead Director said: “Since being awarded the CIF funds last year, the Pool E awardees are mobilising well and a number have already delivered valuable SME functionality. We have a proven process built into the Alternative Remedies Package to successfully manage the return of funds and we will now look to redeploy £5m to potential applicants who can deliver choice and effective solutions to SMEs.”

Onfido raised $100m in a round led by US investment giant TPG Growth last April 2020. Mike Tuchen replaced Husayn Kassai, co-founder of Onfido, as CEO in the following November.