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Identity verification startup IDPartner Systems has raised a $3.1 million seed round led by Abstract Ventures, the company tells Axios exclusively.
Why it matters: The startup’s technology could make identity verification a profit center as opposed to a cost center.
How it works: San Francisco-based IDPartner is building an identity verification network that allows banks to offer single sign-on authentication services to customers.
- Doing so would let those customers leverage their banking credentials to sign in to third-party websites.
- CEO Rod Boothby says participating banks also benefit by deepening relationships with customers.
Between the lines: The company was founded by former Santander identity and payments execs, including Boothby, who was the global head of identity at the multinational bank.
- Santander, which has more than 150 million clients and over $1.5 trillion in assets under management, was investing heavily in ensuring that it could identify customers when they first joined, recognize them when they returned and protect their assets.
- “I realized there's an arbitrage opportunity, that [identity verification] shouldn't be a cost center for the banks when it could be a profit center,” he says.
- So he pitched the idea of delivering “identity verification as a service,” leveraging the investment banks were already making in KYC and offering it to others.
Yes, but: To make the identity verification network useful, it would need more than just Santander participating.
- The founding team worked to lead the Open Digital Trust initiative at the Institute of International Finance and partnered with OpenID as a way to get other banks involved, Boothby says.
- “There's a clear need in the market to help distribute these identity verification capabilities,” Boothby says. “So we provide… a global marketplace for identity verification.”
Of note: Foundation Capital, Circle Ventures, Firsthand Alliance, Correlation Ventures, Success Venture Partners and Aleo also participated in the seed financing.
- Angel investors include Lance Armstrong, former Founders Fund chief scientist Aaron VanDevender and former SEC Commissioner Joe Grundfest.
