Passbase gets $10M as it refocuses its ID verification tools on crypto - Gadgets Price - Gadgets Price
Passbase gets $10M as it refocuses its ID verification tools on crypto - Gadgets Price

Digital Identity Startup Passbase, which provides SDKs for performing remote authentication, has raised $10 million in Series A funding as it focuses on crypto compliance — tools to help fintechs with rapidly evolving regulatory requirements.

Funding is led by Costanoa Ventures, with participation from Lakestar, Eniac Ventures, Cowboy Ventures and Seedcamp.

It follows an unannounced $3.5 million starting round — which nearly doubled the $3.6 million in seed funding that Passbase raised in 2019. So the total amount that the startup founded in 2018 has raised so far is about $17.7 million.

The digital identity space is overcrowded, but when it comes to crypto compliance, Passbase likes to point back to early experience and claim it as a differentiator — the team started building a cryptocurrency wallet before moving to identity verification — which it claims. that it helps it understand the needs of that particular (and some might be idiosyncratic) industry.

“Our primary focus is on crypto,” the startup says, describing the typical customer for its SDKs as a “fast-growing digital first product for financial services, especially fiat to crypto onramp services.”

Passbase’s subscription developer product provides tools toverification flow and back office compliance for legal needs such as AML (anti-money laundering), KYC (Know Your Customer) and age restrictions — with different levels targeting startups, growth and business users.

The highest claim is that the product integrates in just 30 minutes and covers more than 6,000 IDs in 190 countries and 15 languages.

Passbase says it has about 180 customers for the dev product at this stage.

While in the past year it says sales have grown 8x.

While Passbase sees the (hyperfoam) crypto market as the greatest opportunity for its regulatory support technology, it also says it is monitoring developments around online age verification – an area that is receiving increasing attention from regulators in certain markets (such as the UK) as a result of concerns about the safety of children.

“Age verification is a secondary priority, but we have a few use cases such as online gaming, digital cannabis, online e-cigarette sales, and online alcohol sales… Online Sales of E-Cigarettes to Children Act, and others,” told us.

Passbase says the Series A funding will be used to launch a new no-code policy system that will allow customers to design their own onboarding flows for multiple regions and regulatory requirements — with the startup saying it has a strong focus on scaling companies seeking compliance support as they expand into new markets and geographies.

“This will solve the need for businesses to both understand what to do to comply in different markets (i.e. through policy templates) and manage how to do it (i.e. workflows within our verification product),” suggests Passbase about the inbound policy tools .

Expanding the system’s capabilities to provide what it considers “market-optimized onboarding solutions for different regions and use cases” is another planned goal.

Its overarching vision is to be a key player in a digital identity network comprised of a shareable KYC token and a verifiable reference model – which it claims will enable “a privacy-preserving identity ecosystem” as envisioned by the decentralized identity model now being developed. being hyped as ‘Web3’.

However, there are a number of (rather better) startups that also sell identity verification tools – Passbase lists Jumio, Onfido, Persona, and Veriff as its closest competitors.

Notably, Stripe has also recently added ID checks – launched this summer, creating a new competitive layer for AI-powered authentication through a self-service tool.

The arrival of Stripe is clearly causing a lot of headaches for all startups based on dreams of becoming “Stripe for Identity Verification” (which was literally how Passbase talked about its company in 2019).

But despite fierce competition for core ID checks, Passbase isn’t throwing in the towel – it’s just betting on specialization in crypto compliance needs (and there’s a market for specialized crypto compliance tools). Hence, its marketing thrust now talks about bringing “KYC to crypto” – and is silent about Stripe’s entry into its field – again arguing that its early experience with crypto and Web3 provides a competitive advantage to the crypto niche it sits on. now directs.

“It’s important to remember that our team came from the Web3 and Crypto space with Coinance. We understand the needs of Web3 better than anyone in the IDV [identity verification] room. These competitors existed when we were looking for solutions and there’s a reason we didn’t choose them,” it argues, evoking the crypto hype.

“Our seed round has led us to be a competitive solution in IDV, with improvements such as more flexible pricing for scale companies, a more user-friendly verification flow, deeper customization for product leaders, and better documentation so developers can integrate in minutes, not weeks. The Series A is about taking the next step towards an accessible global compliance solution and the Web3 decentralized identity model is built to facilitate this.”

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