Behind the Investment: Identiq – A New Approach to Identity Verification
How do you determine someone is who they say they are? In an increasingly digital world, the concept of a user’s “identity” is multi-faceted. Companies with an online presence must consistently verify a user’s email, age, address, credit card, phone number, etc. without ever interacting with the person face-to-face. This process of identity verification is critical in order to mitigate fraud and ensure compliance.
However, the identity verification process typically relies on third party exchanges for information, which introduces several complications for companies and friction points for users. Reliance on third-party exchanges makes the process 1) expensive 2) inaccurate, as information in these exchanges becomes outdated quickly, and 3) insecure, as every time companies validate users, they send their personal data out to the third party data providers (which hackers target as gold mines of information).
Identiq has set out to address these challenges inherent in the identity verification process by rethinking it altogether. Identiq’s solution is a peer-to-peer, first-party data collaboration network. Their method allows companies (“network members”) to ensure the data they’ve been given by a new user, matches the information already known and trusted by other members of the network, without sharing or exposing that data in any way.
The network is built on the premise that companies have valuable user data internally that is likely relevant for other companies’ identity checks. Rather than querying third-party databases, why not check to see if a user who is new to you, is already known and trusted by other companies? For example, if a ride-sharing company and credit card company have both already validated that John Doe has X cell phone number and Y address, then a home-sharing company can expedite the verification process when John Doe signs up with the same information.
Identiq has key innovations that make building this network possible. Their cryptographic protocol is built such that first-party data never leaves a company’s server. This means that personal user data is NEVER shared with other network participants, or even with Identiq itself.
While currently focused on identity verification and fraud prevention, Identiq’s solution has much broader application. We see the network’s potential to extend to uses cases such as KYC/AML, payment/transaction fraud, and credit rating, to name just a few. As consumers’ online presence grow, so will the need for companies to verify people are who they say they are.
Identiq’s leadership team is comprised of the perfect mix of repeat entrepreneurs, cryptography PhDs, and risk & privacy experts, uniquely well-positioned to scale a collaborative data network.
We are excited to announce that we are co-leading Identiq’s $47M Series A alongside existing investor Entrée Capital. The market is hungry for Identiq’s solution. With a differentiated approach to a decades-old problem, we are excited to assist the team in scaling the network to meet this growing demand.