Socure Raises $450M at $4.5B Valuation - Fintech News
Socure Secures $450 Million in Series E Funding
Socure, a firm specializing in identity verification through the application of AI and machine learning, has announced the successful completion of a $450 million Series E funding round.
This funding round was spearheaded by Accel and T. Rowe Price. The investment significantly elevates the company’s valuation.
Valuation and Funding Details
The current valuation now stands at $4.5 billion, a substantial increase from the $1.3 billion valuation achieved in March during its Series D round, where $100 million was raised.
This new valuation positions Socure as the highest-valued privately held company within the identity verification sector, as stated by the company itself.
Bain Capital Ventures and Tiger Global are joining as new investors in this round.
Existing investors, including Commerce Ventures, Scale Venture Partners, and Sorenson Ventures, also contributed to the funding.
To date, Socure has raised a total of $646 million since its founding in 2012.
Identity Resolution Engine and Customer Base
Socure’s core technology, an identity resolution engine, leverages predictive analytics to analyze over 8 billion records.
This process creates a comprehensive, multi-dimensional view of a consumer’s identity, aiding in fraud detection, even for individuals traditionally difficult to identify.
These include members of Gen Z, those with limited or no credit history, and newcomers to the country.
The company serves a diverse clientele, encompassing 12 of the top 15 banks, alongside numerous fintech companies, online gaming platforms, and crypto exchanges.
Notable clients include Voyager, Public, Stash, and DraftKings.
Approximately 35% of Socure’s current customer base operates outside of the financial services industry, according to CEO Johnny Ayers.
Future Plans and Expansion
The newly acquired funds will be allocated towards two primary objectives.
First, to advance the company’s mission of verifying all legitimate identities and eradicating identity fraud.
Second, to bolster investments throughout the entire identity verification process, refining both proofing and authentication procedures.
Ayers anticipates substantial growth within the online gaming, cryptocurrency, and e-commerce marketplace segments.
Government Partnerships
Socure is also actively expanding its collaborations with state and federal government entities.
This expansion follows the recent appointment of a new leader for its public sector business.
A key application for Socure’s technology lies in preventing unemployment fraud, which cost the U.S. an estimated $400 billion in 2020.
Growth in the Identity Verification Market
This funding round coincides with a period of rapid expansion in the identity verification market.
The increasing shift towards online transactions is driving demand for more robust security and fraud prevention measures.
Socure has experienced significant customer growth, increasing from approximately 350 clients in March to nearly 1,000 today, spanning a broader range of industries.
Competitive Advantage
Aaron Webster, Chief Risk Officer at Socure client SoFi, highlighted the company’s unique strengths in a statement to TechCrunch.
“Many companies in this field offer solutions for individual aspects of digital identity – such as name, address, or device – but they lack the data science insights provided by Socure’s Sigma+ score.
This score reliably determines both whether an applicant is a real person and whether they are truthfully representing their identity.”
Potential IPO
CEO Ayers has confirmed that Socure is evaluating the possibility of an Initial Public Offering (IPO).
“Our goal is to ensure we are fully prepared for a public offering in 2023,” Ayers stated.
“We anticipate entering the market in the near future.”
