Citadel ID Secures $3.5 Million in Funding

Citadel ID, a company specializing in income and employment verification, has announced a successful funding round totaling $3.5 million. The startup delivers an API solution to businesses, enabling them to efficiently confirm consumer employment details.

Investment Details

The funding was provided through a combination of venture capital firms and individual investors. Abstract, Soma VC, and Chapter One participated on the venture side. Additionally, Brianne Kimmel contributed capital to the round.

Notable angel investors included individuals with prior experience at companies such as Zynga (Mark Pincus), Stripe (Lachy Groom), and Carta (Henry Ward). (Fathom Capital also made a significant investment in this round, as noted by the company.)

Company Origins and Development

Citadel ID was established in June 2020. Remarkably, the company secured its initial customer and launched its product within the same year.

The concept for Citadel ID originated from co-founder Kirill Klokov’s experience at Carta, a cap-table management company that also operates a private stock exchange. Klokov identified significant challenges in verifying crucial data points like employment history, income, and identity while working on the company’s technological infrastructure.

Addressing a Market Need

Carta’s operations, involving financial transactions and stock management, highlighted the importance of rapidly verifying employment information. However, Klokov determined that existing market solutions were inadequate. Building custom integrations with numerous payroll providers was a complex undertaking.

Alternatively, utilizing established products like Equifax’s The Work Number proved to be costly and offered limited data coverage. This realization prompted Klokov to co-found Citadel ID.

Citadel ID’s Solution

Citadel ID rapidly developed integrations with payroll systems that offered coding access. Where older systems lacked such access, the company implemented workarounds. The service empowers individuals to grant access to their employment data, facilitating quick verification of income for purposes like rental applications, or employment status for companies like Carta.

The startup estimates the annual market demand for these types of verifications in the United States to be in the hundreds of millions of dollars, indicating substantial growth potential.

Business Model and Growth

Currently, Citadel ID serves approximately 20 customers and operates on a per-verification pricing model, as reported to TechCrunch.

The company’s approach of offering data access primarily through an API, rather than a traditional software-as-a-service (SaaS) model, aligns with a growing trend among startups. This “headless” approach, delivering products via developer tools, is gaining traction, mirroring the success of companies like Twilio.

Future Outlook

It will be interesting to observe Citadel ID’s scaling progress as it prepares for its Series A funding round.