The Farm Boy Who Aims To Become the World’s Digital Sheriff
Founder of the Year, Kaarel Kotkas built Veriff on a simple island mantra. From feeding cows on the island of Hiiumaa in winter to securing global transactions for the likes of Uber.
Veriff founder Kaarel Kotkas is barely making a dent in his third decade, yet the islander from Hiiumaa has been making a dent in online verification for over 10 years now and sits in the coveted category of unicorn founder.
He’s also in the controversial category of being a Forbes 30 under 30, but given that his platform is solely built on trust, it’s unlikely that we are going to see a Netflix documentary about a fall from grace! Surely not as they prepare to go public.
Veriff’s AI-native technology uses automation and human expertise to accurately verify users worldwide. It counts Bolt, Bumble, Deel, Instacart, Monzo, Starship, Trustpilot, Uber, and Western Union among its clients.
“For us, it’s all about building the trust infrastructure and becoming the source of truth for trusted identities online,” he says as he explains that verification is not just for onboarding but “it’s now becoming essential for every single transaction online.”
“AI has, for sure, accelerated identity adoption - like COVID did. And identity adoption, which can go across the board, is required to be very accurate, global, and seamless in terms of real-time experience. This means it needs to be so much more than just a compliant check mark, because in Estonia, we even bet our democracy on the accuracy of it,” he says.
“Warren Buffett said you never know who is swimming naked until the tide goes out, and there was quite a lot of skinny dipping in this market,” he adds.
Keen to learn more about the founder behind one of Estonia’s most successful companies and the verification process for many of the apps I use, I sat down with Kotkas to find out more about the man behind the mission.
Opening up these conversations can be a little awkward, but the fact that he has to adjust the blinds as the sun is blinding him on a winter’s day in Estonia gives us the perfect amusing anecdote to hit our stride. Who couldn’t be in great form when the sun is shining in January?
I quickly get schooled on the “best” island of Estonia, Hiiumaa, his birthplace. Growing up on a farm with 60 cows, one horse, and over 30 sheep with water sports as a pastime, he first moved to the mainland as a teenager with the wind in his sails, literally. He moved to Tallinn to train as a budding windsurfer until a broken ankle knocked him out of contention.
With hopes of making it big in the world of windsurfing dashed, Kotkas had more room to work on other projects. It’s surprising how much time you get back before and after school when the training regime stops.
The main goal was to become a doctor, studying at Tallinn Reaalkool, but the itch to do something and make ends meet led him to start a company. On that sold power banks at the music festival across the Baltics, as smartphones were becoming more popular at the time, he was taking advantage of the situation… and the poor battery life of yesteryear!
The doctor thing went out the window when he started building websites and getting more curious about online security, or rather, people’s lack of it. Thinking he’d caught his first big break building websites, he moved out of his father’s house, establishing some kind of independence, but he admits it was short-lived. Things fell through with the business, and he ended up sleeping on his sister’s couch.
Wise was known as Transferwise in those days, and Kotkas, spotting an opportunity to improve its security, decided to shoot his shot and sent them an email. That email ended up being the catalyst for Veriff, but back then, it led him to go in-house to help the firm improve its verification system by leveraging his hacker skills.
“That’s the first time I thought, ok, let me do the tricks that I did as a kid living on an island where I was the youngest, and essentially the designated IT guy at home,” he says.
Still being able to use the same tricks in 2015 seemed unfathomable to Kotkas, and so the seed for Veriff was planted, not inside Transferwise; that relationship parted ways, but it grew into something much better. Wise co-founder Taavet Hinrikus invested in Veriff and served on the board. And Wise is, of course, a customer.
The vast power of technology, like the iPhone 6, which was billed as millions of times more powerful than the hardware that powered the Apollo 11 moon landing, was fuel for Kotkas to build a robust verification system to stop people like him from beating the system.
“Instead of pictures, let’s use video from the beginning to the end. Let’s use device and network fingerprinting, and essentially, instead of three pictures, let’s have our 1000 data points between which we can automate and objectively deliver decisions at scale,” his thoughts on what was going to make Veriff stand out.
Where did the name Veriff come from? To be honest, I don’t know why I didn’t figure this out sooner; it’s an amalgamation of verification and sheriff.
“The sheriff is the one who kept villages safe and got people to abide by the laws, then in order to trust, you have to verify - I thought Veriff is going to be the one that becomes the guardian of behaviour online,” he explains to me.
Entrepreneurship wasn’t really a word that Kotkas had associated with, despite his constant graft of setting up side hustles since he left the island. “It was just the only way of getting going and fixing stuff,” he says. But it was far before he crossed over the borough boundaries of Tallinn that the act of getting stuff done was ingrained.
It’s at this point in our chat that I get an Estonian lesson. A term I hope I never adopt, Kotkas teaches me the phrase ‘Ei viitsi,’ meaning ‘I don’t feel like doing it’ or ‘I can’t be bothered.’ This was a concept he hadn’t come across until moving to the city. Growing up on a farm, there was no such luxury.
“It was new for me, as I couldn’t say ‘I don’t feel like’ in the winter, going to give hay to the cows before school, they had no other way of getting it. It was just so basic,” he tells me. Clearly, he has not adopted the phrase either.
We discuss what it means to be a founder and what entrepreneurship is like. “You have to make a conviction - then all the rest of the steps are just picking the right tools for the task at hand, and you do what it takes,” he tells me. “You’ve got to be humble, and ask around, and make fun of yourself as well, along the way.”
I asked him when he had the moment that he realised that he had ‘made it’. To my surprise, he tells me he hasn’t had it yet.
“I’d really like that, but there is also another part, if I do have this day - it also means that I’ve given Veriff everything that I have to give - and I have somebody that can take it over when I’ve reached the point, but I still haven’t,” he says.
While we celebrate Veriff's success, it’s worth examining the tough parts, too. The dark moment where the hard choices had to be made - the layoffs. In both 2020 and 2023, Veriff cut its headcount. I ask Kotkas how he felt to be in that position.
Speaking about the layoffs during COVID, he says, “It was a tough time.” The company hired 200 in six months due to increased activity with crypto firms, but when a funding round was pulled, the rug was pulled from under Veriff.
“You need to make a call based on the information you have, but always taking as much care as is in your power, of the people - making the decision is always so much harder than the execution of it. It was a hard call, but it was required,” he says.
“You always do everything with humility and integrity, but at the same time, you’ve got to put the company first, as in the long term this is best for everybody involved,” he adds.
As we begin to wrap up our chat, I ask him what’s the dream…
“As much as tech has enabled us to access the whole world without leaving our seat, and tech has been driving the acceleration of globalisation and this sense of living without borders, but the moment we go to, let’s say, Australia, we can’t take our trustworthiness, our credit score, or anything with us,” he says.
“We are still very fortunate with our passports in terms of our ability to travel, but It’s still very tactical and political that some people can’t despite them being amazing human beings - I’d like to build up the pattern of trust that meets people’s true identity, which is defined based on their interactions and the pattern of credibility, not that something is granted by the luck where you are born from,” he explains.
“So my goal is that in the future, real identity, like a passport, will be chipped by Veriff not only by the governments, to enable people equal access to services driven by their real identity,” he adds.
We close our chat with the news he’s heading off to the States until he can get back out on the water here. Given that the blinding sun we experienced was a rare day for us in January, I understand his choices.
“He has seen several big ups and downs in Veriff's journey! But it has never stopped him from being still the most positive & kind founder I know.”
- Ragnar Sass’s LinkedIn post about Kaarel Kotkas