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Prove Identity, the smartphone-based identity verification startup that originally named itself Payfone years ago before rebranding in 2020, has raised $40 million. According to the company, the funding is coming at a “unicorn status” valuation, which will see it cross the $1 billion mark. The company, which has about 1,000 business customers, said its business has grown about 40% in the past year.
Prouve’s tools use tools like pre-filling information, customer verification flows, and facial recognition to trigger password-free authentication. They were originally created to reduce some of the friction and subsequent shopping cart abandonment around e-commerce transactions, leaning into the increasing ubiquity of phones to help manage the process. (Speed remains a priority: It claims its tools today provide “79% faster onboarding, 35% reduction in abandonment, and 75% reduction in fraud.”)
Prow said it plans to use the funding to build more tools for digital payments and commerce as well as fraud detection, and it looks like mobile handsets will remain a central part of the proposal.
The raise is being co-led by strategic backers MassMutual and Capital One, and comes at a time when digital identity remains a hot topic.
The number of cybersecurity breaches caused by malicious hackers using stolen identity information continues to grow – underscoring the opportunity for more effective tools in the market and the interest of investors to bet in this area.
A spokesperson for the company told us this round gives Prove “unicorn status,” without saying what that means in terms of robust numbers. For some context, when the company last announced significant funding — $100 million just days before its big rebrand — its post-money valuation was $549 million, according to PitchBook data. This is a figure that has since been discontinued.
Notably, in 2020 CEO and founder Roger Desai told us that Payphone (as it was then known) had processed 20 billion authentications in 2019, and it was aiming to increase that figure to 100 billion by 70 billion year over year. % was growing. transactions in the coming years. Its site does not give updated transaction numbers today (and its 40% increase today is certainly less than 70%). This shows a lot of competition in this sector.
Of course, Proove isn’t the only company eyeing this opportunity.
Apart from older startups like Jumio, there are also startups like Thetare and Fourthline building approaches based on AI. Large PE firms are also getting in on the action, developing and consolidating technologies and customer bases for greater economies of scale.
And then there’s WorldCoin, co-founded by OpenAI’s Sam Altman, which wants to bring an entirely new concept (and business) to the world of digital identity. It is building physical ‘orbs’ that are intended to be scanned with irises to create a network of digital IDs, which will in turn link with a new global cryptocurrency, and an app for payments that will integrate both. Will add. The startup is already causing controversy in various markets, but it’s also raising some serious funding, so it may be around for a while.
While projects like WorldCoin are still in their early days, Prove has expanded its customer base beyond commerce. It said its 1,000 customers include 9 of the top 10 US banks, 2 of the top 3 global cryptocurrency exchanges, 3 of the top 5 US retailers, 2 of the top 3 US healthcare companies and 2 of the top 10 insurance companies. To 6 are included. in the US” (FanDuel recently signed on as a customer; others include Experian and Visa; others include Starbucks, BlueCross BlueShield, and DocuSign.)
According to Grandview Research, the total market for identity and access management was projected to be worth around $16 billion in 2022, and this will continue to keep investors interested in new technology and ways to deal with it.
“ProVe is driving a paradigm shift in the way businesses and consumers interact securely,” said Charles Swirk, Partner at MassMutual Ventures. “As consumers continue to experience risk in engaging with brands, Proov’s solutions ensure that verified and authenticated information is being used, enabling brands to drive both loyalty and revenue. We are delighted to continue supporting Proove as they redefine the way we look at digital identity.” With this investment, Swirk is joining the startup’s board of directors.
