Socure raises $450M to strengthen its online identity verification solutions
Socure announced its significantly oversubscribed $450M round at a $4.5B valuation from a number of the world’s best growth equity and public market investors.
The company achieved a $4.5B valuation just seven months after its $1.3B Series D, on the back of 500% year-over-year bookings growth and nearly $1B of investment demand, earning Socure the highest valuation for any private company in the identity verification space.
The round is part of a Series E transaction led by Accel alongside funds and accounts advised by T. Rowe Price Associates, Inc. It also includes two new investors, Bain Capital Ventures and Tiger Global, as well as participation from existing investors Commerce Ventures, Scale Venture Partners, and Sorenson Ventures.
Socure will substantially accelerate its investments in product innovation to address identity verification challenges across the entire digital consumer journey, penetrate new markets including the public sector, as well as continue to attract and retain the best product, data science, and engineering teams in the world.
The capital will also allow Socure to maximize the scale and intelligence of its customer consortium data and fully-automated ID+ platform to not only prevent third party and synthetic fraud, but also address payment and first party fraud risk while enabling world-class self-service analytics capabilities.
Socure ID+ has become the preferred identity verification and fraud platform for enterprises of all sizes and is trusted by four of the five largest banks, seven of the 10 largest credit card issuers, top Buy Now, Pay Later (BNPL) providers, top investment management firms, top crypto exchanges, and the majority of top fintechs.
The company is also accelerating its market leadership in telehealth, gaming, e-commerce marketplaces, and the public sector. Socure customers have also become investors in the company including Citi Ventures, Wells Fargo Strategic Capital, Capital One Ventures, MVB Bank, Voyager, and Synchrony. Other marquee customers include Chime, SoFi, Varo Money, Public, Stash, and DraftKings.
Socure has emerged as the clear leader providing a complete identity verification and fraud platform with the highest adoption across all industries as it distanced itself from the competition with a 500% year-over-year bookings increase, 221% year-over-year customer growth, and five consecutive quarters of record year-over-year revenue growth.
Last quarter, Socure also achieved a net retention rate of 179% driven by near-zero attrition as its enterprise customers increasingly deployed multiple Socure products across various divisions, making Socure their complete fraud prevention, device, KYC, AML, and document verification platform.
Identity fraud continues to be fueled by the pandemic as more businesses and government agencies race to digitize, but with devastating consequences. In the private sector, according to Javelin Strategy & Research, identity fraud losses in the U.S. in 2020 reached a total of $56B. And in the public sector, 2020 identity fraud losses in unemployment alone totaled $400B.
Amidst the race to digitize, enterprises need to fuel their growth with new customers to remain competitive. Particularly those that are hard to identify including the 45 million+ group of U.S. citizens that are credit invisible, especially younger, thin-file 18-25 year olds and immigrants.
Due to the unparalleled accuracy and inclusiveness of Socure’s KYC identity verification solution, if used exclusively across the country’s financial services industry, Socure’s technology could more than double the amount of automated approvals made in the U.S. in any given year for this population compared to legacy solutions.
Socure’s technology leadership highlights
- Socure has built the most comprehensive identity graph in the industry which includes an identity resolution engine that analyzes over eight billion records and more than 700 million good and bad identities to achieve the most accurate view of identity possible.
- Socure’s Sigma Identity Fraud solution delivers the most precise identity fraud classification model in the industry by utilizing over 17,000 features that analyzes every dimension of a consumer’s identity—name, email, phone, address, IP, DOB, SSN, device, velocity, network intelligence, and real-time consortium feedback data—all in a single product. It also increases auto-approval rates by up to 60% due to industry-leading classification accuracy while also reducing fraud by 90% in the riskiest 3%, making it the only product on the market to solve for both fraud protection and revenue generation.
- Socure’s Predictive Document Verification solution employs the industry’s only patent-pending machine learning classification models that utilize inputs from computer vision algorithms, various dimensions of identity elements such as device and phone ownership, and selfie-to-document derived patterns fine-tuned for customers’ business needs.
- Socure’s patented inclusive KYC solution delivers industry-leading auto-approval rates of up to 98% for mainstream populations, and up to 94% for hard-to-identify populations such as Gen Z, millennial, credit invisible, thin-file, gender neutral, and new-to-country.
“When you’re a market leader, you move from attacking and replacing the incumbents repeatedly as you earn your seat at the table to truly being a strategic partner to many of the best companies in the world. With this additional capital, we will substantially increase our level of commercial velocity and intensity in solving complex customer and societal problems, while maintaining our Day 0 founder’s mentality and continuing to attract the market’s best product, data science, and engineering minds to join our already incredibly talented team.
“We will remain laser focused on our mission to verify 100% of good identities and eliminate fraud on the Internet while holding ourselves to the highest quality standards and cementing Socure as the top performing company in the industry,” said Johnny Ayers, Founder and CEO, Socure.
“Every team building a digital product faces challenges validating users and security. Socure’s API has quickly become foundational to these teams. The platform has been transformational for the identity market, and we’re excited to further our support of Johnny Ayers and the team,” said John Locke, Partner, Accel.
“With its differentiated technology and strong management team, Socure is well-positioned for long-term growth as a leader in identity verification and fraud prevention on the Internet. We believe that the company has the potential to become much larger over time through its ability to develop strategic partnerships with some of the largest financial institutions and a range of companies across other industries, and we are pleased to express our conviction with this investment,” said Andrew Davis, Director of Private Investments, T. Rowe Price Associates, Inc.
“Socure has emerged as the clear leader in online identity verification. While Socure started out in the financial services vertical, it will not end there; the use cases for identity verification online stretch far and wide, and Socure is uniquely positioned to serve them. Speaking to dozens of customers gave us conviction that Socure has earned their trust and become the default choice in this increasingly important market,” said Merritt Hummer, Partner, Bain Capital Ventures.
“Socure’s patented approach to AI and ML dramatically improves financial inclusion, democratizes access to services and benefits as well as eliminates unfair, bias-driven friction further differentiating it from competitors. The company also leads the market by significantly reducing fraud and customer friction in a single platform for companies across multiple online industries,” said John Curtius, Partner, Tiger Global.