Digital Identity Startup Socure Files For $5.6 Million Series A
Socure, the identity verification startup, has raised $5.6 million in a new funding, according to documents filed to the SEC.
Not much can be deciphered from the Form D filing, which will presumably be the company’s Series A round, published by the SEC earlier today. Socure has 34 investors who have already invested in the offering, and are still looking to sell $1.3 million out of the $5.6 million. The filing did say that $2.2 million of the equity would be offered via convertible notes — a tactic used by startups and venture capitalists to invest in a company without preemptively valuing the company. Socure has raised $4.2 million in total funding, according to Crunchbase.
The New York-based company uses “social biometrics” — the combination of biometrics and social media data — for identity purposes. By scanning social media profiles and comparing them to public data, Socure develops an “authenticity rating” between 1 and 10 to see if the user is who they say they are. The company says that this feature — which banks can integrate using an API — can be used to cut down on KYC costs for financial institutions.
More recently, Socure launched a pilot program for incorporating facial biometrics. Socure CEO Sunil Madhu explained to Bank Innovation how the facial recognition is better than typical password and identifying systems: “The challenge with biometrics,” Madhu says “is that users need to provide training data, whether is be a generic passphrase or an initial eye-scan. Based on the plethora of images available online, our technology eliminates the need for training.”
Socure has the potential to directly impact banking, with APIs and SDKs available for financial institutions that license the product. As a SaaS company, Socure makes money when customers license its technology for use with their existing services. (The company declined to indicate its revenue in its Form D filing).
Digital identity and identity verification is an important sector of financial technology that venture capitalists are showing interest in. SBT Ventures managing director Matteo Rizzi told Bank Innovation that “digital identity, identity management and biometrics” are areas with “lots of technology, but no focus (yet).” With funding rounds like this one, however, expect a focus to quickly emerge.
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