First comes the network buildout, then the tipping point, and then finally the coveted unicorn status.
But as Trulioo Co-founder Stephen Ufford told PYMNTS’ Karen Webster, the path from startup to a well-funded network that’s prepared to digitally verify every human and business in the world is a marathon, not a sprint.
“The last couple of miles on the journey from 5 [billion] to almost 8 billion [people] is going to be the hardest,” he said of the company’s efforts tied to its digital identity verification platform, GlobalGateway.
The interview came against the backdrop in which Trulioo said Monday (June 7) that it had raised $394 million in a funding round that values the firm at $1.8 billion — the largest funding round in the ID verification space to date. The Series D round was led by TCV, one of the largest growth equity firms, with participation from a roster of existing investors including Citi Ventures, Blumberg Capital and others.
The company has said the U.S. digital ID market is expected to increase to as much as $30 billion within the next two years, as estimated by One World Identity. Along with that growth track, Trulioo has said that in the past year, it doubled its revenues. The movement toward digital IDs is a global one, where, for example, member states in the EU are aiming to wrap IDs around payments and other services. A single, federated ID would allow access to government services and websites.
Interoperability is key, and so is eliminating the friction inherent in collecting, storing and analyzing data. The fragmented landscape in which different countries have different approaches to IDs means — in Ufford’s telling of it — that everyone thinks they are their own experts, and ultimately that fragmentation creates an opportunity for the network (such as Trulioo’s) that enables interoperability.
Ufford noted that “standards are something governments do very well — technology is not.” He said eIDAS (electronic IDentification, Authentication and trust Services) is an encouraging step that helps governments become service providers — and that the next generation of Trulioo products will include some type of reusable government credential for several use cases across its network.
After all, there are billions of people who have yet to be identified, officially, much less verified. (Trulioo has been able to verify more than 5 billion people to date.)
“We’ve always said the journey from 4 [billion] to 5 [billion] was certainly harder than 3 [billion] to 4 [billion],” he said.
He drew a parallel between the analog to digital players who have revolutionized document scanning. The promise of a pivot to full digitization has not been fully realized because many of the people on the last mile don’t even have analog.
The next generation of ID verification, he predicted, will be tied to a combination of third-world countries using cryptography around currency, such as digital fiat or central bank digital currencies (CBDCs). The governments that issue CBDCs will also be the ones to issue digital IDs — which will have the positive ripple effect of changing the availability of data services for those last few billion people.
(As he noted to Webster, a bit tongue-in-cheek, if there’s ever been an incentive for mankind to do anything, that incentive lies in the almighty dollar.)
The Network Ignition And The Fundraising
With a nod to the fundraising, Ufford said the journey from startup to unicorn (defined as a tech firm valued at more than $1 billion) has been a long one — borne out over years.
“None of us were born overnight,” he said of the unicorns. “It’s a much longer path than it seems.”
And at a high level, the long journey has been spent building a network (in Trulioo’s case, focused on digital IDs), which he maintained is the hardest type of business to build, based as it is on collecting and aggregating huge amounts of fragmented data, often tied to paper documents.
As Ufford noted, no one wants to build the network — they want to build on top of those networks.
“But someone has had to do this with identity,” said Ufford, who added that TCV itself has had experience investing in and building out networks. “What the funding round shows is that … if there is good momentum in the business, and if you do the hard work, it eventually starts to pay off.”
He said for Trulioo, the moment of “network ignition” came a few years ago after its Series C round, when scale started to gain momentum, particularly among FinTechs and for authentication of IDs as people made payments, and then suppliers and service providers came on board.
“You never know when it will come,” he said of that ignition, “and we’ve always looked at network traffic as a kind of lagging indicator.”
With the most recent funding in hand, the company will be deploying capital to further its efforts in developing what Ufford termed “low-code tools” to help developers and enterprises (particularly FinTechs) move beyond compliance use cases, creating the next generation of Stripes and Airbnbs.
“A digital identity is so broad, it doesn’t just touch regulated use cases,” he said.
As he told Webster, the world “needs a global identity network. And what we will do with this money is continue to build it out at a greater scale.”