February 7, 2024

UK fintech Onfido in talks to be acquired — with first backer set to make 320x return

The value of the proposed acquisition is undisclosed — but all of Onfido's backers are set to make a profit on their investment, says the company

London-based customer identity verification scaleup Onfido has entered into talks to be acquired by US payments company Entrust. 

Onfido, which counts the likes of Revolut, Adyen and Orange as customers, announced the news following a choppy 12 months on the European fintech funding scene. 

Startups in the sector picked up just $8.2bn across 2023, according to Dealroom — less than a third of the record $29.4bn raised in 2021 and the lowest figure since 2018.


The company hit a $400m-600m valuation (Dealroom estimates) when it last raised in a $100m Series D in April 2020, but made layoffs in 2023 as it looked to fast-track its path to profitability.

While the value of the proposed acquisition is undisclosed, Husayn Kassai, founder and former CEO at Onfido — and now advisor to the company — tells Sifted that all the startup’s backers are set to make a profit on their investment. 

Oxford University, Onfido’s first investor with a cheque of £12k in 2012, could make a 320x return, he adds. 

The acquisition remains subject to regulatory approval, which Kassai hopes won’t “take longer than a few months, at the latest”.

The Onfido story

Onfido — which launched in 2012 — provides AI-driven biometric and document identification tools to companies in the financial, e-commerce and gaming sectors. 

It’s since raised $211m from investors including TPG, Talis Capital, M12 and Eurazeo; 20% of the company is owned by its employees (excluding founders) — more than a dozen of which will go on to become millionaires if the sale goes through, says Kassai. 

The company was once reportedly considering a US IPO and CEO Mike Tuchen told Sifted in July last year that it was now focused on reducing its reliance on VC cash and selling more to customers in the EU.

Back then, Tuchen said the company’s net expansion rate across its existing customer base (customers’ increased spend over time) was “still healthy, but not what it was two years ago”.

Onfido made an operating loss of £70m in the year to January 31 2023 — up from £45m the previous year, according to Companies House filings. Turnover increased from £95m to £102m across the same period. Onfido says it has more than $130 million in annual recurring revenue (ARR).

Todd Wilkinson, CEO at Entrust — which is valued at $12bn — tells Sifted that the company is looking to acquire Onfido’s “talent and technology” and doesn’t "anticipate cost reductions”, such as layoffs for the startup’s 500 employees. 


Onfido will continue to work with its customers as normal and a decision on whether the brand will continue as a standalone will be made at a later date, he adds. 

A fintech market ripe for M&A

Most industry watchers predict that there'll be a whole lot of fintech M&A happening in 2024, with many startups that raised during the boom times reaching the end of their runways and struggling to convince investors to part with more cash amid the funding crunch. 

70% of fintechs are coming to the realisation that they can’t build a sustainable business and “there's a lot of M&A happening right now”, Creandum’s Simon Schmincke told Sifted last month. “Those who are not profitable have a problem getting more money right now.”

In January, insurtech Luko — once a rising star of French tech that raised $75m from investors — agreed a sale for €5m after filing for bankruptcy the previous summer.

But while the market spells trouble for some cash-strapped startups, companies with money in the coffers are on the hunt for bargains. 

“Every week, our large fintechs at Creandum get approached by smaller companies that say, “Should we talk?”,” said Schmincke. “And then you look at the books and you know if we talk in a month, then we can buy you for even cheaper.”

Wilkinson says that Entrust has “typically acquired during downturns” and began “looking hard” at the M&A market 12 months ago.

Kai Nicol-Schwarz

Kai Nicol-Schwarz is a reporter at Sifted. He covers UK tech and healthtech, and can be found on X and LinkedIn