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iProov snaps up $70M for its facial verification technology, already in use by Homeland Security, the NHS and others

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iProov snaps up $70M for its facial verification technology, already in use by Homeland Security, the NHS and others

Biometrics, and specifically facial recognition, have seen a surge of usage in the last several years, first as a tool to help organizations verify identities digitally against rising waves of fraud and cybercrime; and second as a way to help enable that process even further in our socially-distanced, pandemic-punctuated times. Today, a startup called iProov, which provides face authentication and verification technology to a number of governments and other big organizations — attracting some controversy in the process — is announcing $70 million in funding to keep up its growth momentum.

The funding is coming from a single investor, Sumeru Equity Partners out of the Bay Area, which originally started life as a part of Silver Lake before spinning off as an independent operation in 2014. Valuation is not being disclosed, nor is the total raised by the company to date.

London-based iProov has seen a lot of business traction so far in its home market of the U.K., and now it plans to use capital specifically to continue building out its present in the U.S. and other international markets where it’s already started to get a foothold. iProov works at the large enterprise level and its customer base currently includes U.S. Department of Homeland Security, the U.K.’s Home Office and National Health Services (NHS), the Australian Taxation Office, GovTech Singapore and banks Rabobank and ING. iProov said 2021 was a bumper year for the company: it tripled its revenues over the year before (although it’s not disclosing how much that works out to in actual terms).

As a measure of how much, and how, iProov is getting used, the NHS says that as of September 2021, usage of its NHS app — — which uses iProov to power the facial verification that is used to register for the app, which then lets you check and show your vaccination status; book doctor appointments; re-order prescriptions; view your medical records; get advice; and more — ballooned to 16 million users, from just 4 million in May 2021 (now it’s January and there are likely more).

To be clear, this isn’t facial recognition — which founder and CEO Andrew Bud describes as a mere “commodity” these days — but technology, sold as Genuine Presence Assurance and Liveness Assurance by iProov — that lets an organization capture an image of an individual, verify that it’s real against another piece of ID and not a deepfake or other counterfeit image, and proceed with whatever transaction is going on, all by way of cloud-based remote, virtual mobile technology.

Its peak usage last year last year typically would see iProov getting pinged for more than 1 million facial verifications per day.

But that growth has not come without scrutiny and other controversial attention.

Critics have slammed iProov and the UK government for a lack of transparency over how user data is handled in process of capturing and authenticating images for biometric verification, particularly given that iProov is a private company working for a public organization; related to that there have been other ethical questions raised between the links between some of the startup’s earliest backers and the Tory Party (which is currently in power in the UK).

And as of this week (timed to coincide with the funding news?) iProov has also been the subject of a patent lawsuit from a U.S. rival called FaceTec, which claims that iProov has copied parts of its technology and is demanding an injunction (something that could be tricky as iProov increases its focus on the U.S.).

Meanwhile, iProov has also been involved in early work to see how and if its facial authentication technology might be applied in other use cases, such these trials to speed up Covid vaccination certification, another potential avenue for scrutiny.

In an interview, Bud was quick to counter the controversial currents that have swirled around his company and the technology that it’s built.

On the issue of privacy and security, Bud is a longtime veteran of the telecoms and mobile worlds, initially as an engineer and then an executive, who said that his interest in biometrics was sparked after being burned at his previous company, mBlox, where malicious hackers exploited the company’s SMS infrastructure and stole millions of dollars from customers.

The experience made him realize how critical security needed to be both at the end of the provider, but as something that was easy for consumers to engage with too. “It needed to be ultra-inclusive and simple,” Bud said. “How can we ensure something like that would never happen again? I had to solve that problem.” That, he said, was what spurred him to start looking at biometrics, which he believes is the best answer to that question. And from that he built his next company, which became iProov.

“These are fair questions,” he said in response to me raising the issue of privacy and data protection at iProov and its work with public and private institutions. “Privacy is extremely important to iProov and our systems are built to protect users.” Everything is compliant with GDPR or other government-mandated data protection rules, related to data and how it may or may not be used, he added, and the methods that iProov uses to process user data are built to keep customers and their identities safe from being compromised. He also confirmed that none of the data that passes through its system is used for commercial purposes. iProov runs a policy of not knowing the identities or other personal information realted to any photos, but it does store imagery, specifically to help track and block malicious actors and to track anomalies.

On the subject of the patent infringement lawsuit from FaceTec, Bud dismissed it as “completely unfounded,” with a spokesperson sending me a more complete statement after my interview (as well as asking we keep this part out of the story altogether…):

“All of our products have been developed in-house and are covered by granted patents. Accusations that we have used [FaceTec] technology in our products are completely unfounded, and iProov will take all appropriate actions to defend itself and its customers.”

And as for future applications, although the UK government hasn’t yet shown a willingness to mandate so-called “Covid passports” widely — where people have to provide quick verification of their vaccination status to gain entry to events, public venues, workplaces and more — the basics of that technology are already there and being used by a number of other customers, Bud said. These include a recent launch from Eurostar (which runs the train under the English Channel between London and cities on the European continent) for passengers to authenticate their various credentials at home, to reduce the amount of dwell time at check in, where they then can walk through simply by showing their faces to a screen.

Facial-related biometrics, Bud said, are likely to remain the mainstay of what iProov and others will develop going forward for these and similar use cases, although the company also offers a palm-based identification method, too. Primarily, however, iProov and others will have to follow the lead of the organizations they work for: their tech will only be as useful as whatn ever biometric information the original organization collects. (And these days, government-issued IDs, with photos, remain the main source of that data.)

As we move ever more processes to digital and cloud-based platforms, finding ever more watertight methods of verifying identities of users, while evading the increasingly sophisticated approaches of fraudsters and malicious hackers, will continue to be a huge priority. Investors seem willing to place bets on iProov being one of the strong players in keeping those services working as they should.

“We see iProov as becoming the industry standard to establish the genuine presence of anything (a person, a document etc),” said Kyle Ryland, a managing partner at Sumeru, in a statement to TechCrunch. “We hope that iProov will be used not only to accelerate digital onboarding and verification for both online and physical experiences, but also to replace the use of insecure passwords for frictionless authentication and much more. We have a platform that is constantly learning and allows us to remain at the forefront of emerging technologies and new security threats.”

Source: Tech

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Spendesk is the fifth French startup to reach unicorn status this month

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Fintech startup Spendesk is announcing that it has raised an extension to its Series C round. Tiger Global is investing $114 million (€100 million) in the startup. Following today’s funding round, the company says that is has reached a valuation of more than $1.14 billion (more than €1 billion).

In other words, Spendesk is a new unicorn in the French tech ecosystem. Funding news has been accelerating over the last few months in France. In January alone, five startups announced that they have crossed the threshold to reach unicorn status — PayFit, Ankorstore, Qonto, Exotec and Spendesk.

Back Market, an e-commerce marketplace focused on refurbished smartphones and electronics devices, has also raised a mega round and reached a $5.7 billion valuation.

Let’s go back to Spendesk. The startup offers an all-in-one corporate spend management platform for medium companies in Europe. Originally focused on virtual cards for online payments, the company has expanded its product offering to tackle everything related to corporate spending.

Spendesk customers can order physical cards for employees, team members can use the platform to pay outstanding invoices, file expense reports, manage budgets and generate spending reports. By offering everything in a single service, Spendesk wants to simplify accounting and approvals in general so that money moves more freely.

The startup defines its platform as a “7-in-1 spend management solution”, meaning that Spendesk is no longer just a product that lets you order debit cards for your employees.

“We have had this goal since the beginning — we really want to become this platform, this operational system to manage your spending,” co-founder and CEO Rodolphe Ardant told me. “When we started working on the product, we looked at each use case and designed the right workflow for that.”

In particular, Spendesk helps you formalize your internal processes. You can define team budgets, set up complicated approval workflows for expensive payments, automate some pesky tasks, such as VAT extraction.

“We target mid-market clients. Those are customers with 50 to 1,000 employees. We have a few clients that are bigger than that and a few clients that are smaller than that,” Ardant said.

And the company currently has 3,500 clients — around half of them are based in France while other clients are mostly based in Germany and the U.K. Clients have spent €3 billion through Spendesk in 2021 alone.

With its central positioning in the financial stack, Spendesk needs to interface perfectly with other financial tools — banks on one side and ERP products on the other side.

The startup currently supports many of the popular accounting tools used by European companies, such as Xero and Datev. Spendesk customers can also export transaction batches and import them into Sage, Cegid and other accounting software solutions.

Spendesk is also working on automating the integrations with your bank accounts, which could be particularly useful for companies with multiple bank accounts. For instance, you could imagine setting up a rule that automatically triggers a transfer between your German bank account and your Spendesk account when you want to pay a German supplier.

Image Credits: Spendesk

Spend management in Europe

Spendesk isn’t the only spend management solution in Europe. There are some competitors, such as Pleo, which recently reached a $4.7 billion valuation, and Soldo — another well-funded competitor as it has raised $180 million last year.

In the U.S. as well, companies like Brex and Ramp have reached sky-high valuations. And yet, Spendesk doesn’t think it has the same positioning as American startups.

“On the American market, it shouldn’t be called the spend management industry — it’s the corporate card industry. Players like Brex and Ramp position themselves as a payment method,” Spendesk co-founder and CEO Rodolphe Ardant told me. “Europe’s corporate culture is a culture of debit — not credit. We don’t provide payment methods, we provide a process.”

It’s a slight difference in product positioning, so it’s going to be interesting to see if a European spend management startup can successfully enter the U.S. and vice versa.

When it comes to business model as well, Spendesk considers itself as a software-as-a-service company with recurring subscriptions. The startup didn’t want to share any hard numbers for its revenue. Its CEO just said that Spendesk’s revenue “more than doubles every year.”

With today’s funding round, Spendesk plans to triple the size of its team over the next two years. The company plans to have 1,000 employees by the end of 2023.

Source: Tech

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Crypto.com expands venture arm to $500 million to back early-stage web3 startups

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Crypto.com, a popular cryptocurrency exchange, has extended its venture arm’s fund size to $500 million as it looks to more aggressively back early-stage startups to help the nascent ecosystem grow, following similar moves by rivals Binance, Coinbase and FTX.

The broadening of Crypto.com Capital comes less than a year after the Singapore-headquartered firm unveiled its maiden fund of $200 million. The fund, unlike those of many of its rivals, has no LPs (meaning, it’s fully financed by the firm’s balance sheet.)

The maiden fund, whose individual checks run up to $10 million in size, has been so far deployed to back about 20 startups including YGG SEA, multi-chain crypto portfolio tracker DeBank, cross-chain token infrastructure Efinity and Ethereum scaling solution Matter Labs.

Crypto.com will continue to focus on backing early-stage startups, said Jon Russell, who joined the firm as a general partner this month, in an interview with TechCrunch.

With the fund, Crypto.com is broadly focusing on gaming, decentralized-finance and startups innovating on cross-chain solutions. But he cautioned that the industry could change and expand, as it has in recent years, to areas “we don’t know about,” hence the firm is keeping an eye out on everything.

Tuesday’s announcement also further illustrates the growing involvement of cryptocurrency exchanges in being the rainmaker – and beneficiary – of the ecosystem which encompasses the industry in which they operate.

FTX, which has backed over 15 startups, last week announced a $2 billion crypto fund. Its founder, Sam Bankman-Fried, also owns Alameda Research, a venture firm that has backed close to 100 web3 startups.

Coinbase Ventures, the investment arm of the only crypto exchange that is publicly traded, and Binance, the world’s largest cryptocurrency exchange by trading volume, are also among the most prolific investors in the web3 space.

Venture investment in crypto / web3 in 2021 by category (Image credits: Galaxy Digital)

The funding activity in the space, even as most of the aforementioned names often co-invest in startups, is at an all-time high. VCs invested more than $33 billion in crypto/web3 startups in 2021, more than all prior years combined, Galaxy Digital, another prolific investor in the space, wrote in a recent report.

“Valuations in the crypto/blockchain space were 141% higher than the rest of the venture capital space in Q4, highlighting a founder-friendly environment and the intense competition among investors for deal allocations,” the report added.

Scores of venture capital firms have also raised new funds for their crypto investments. Just last year, Andreessen Horowitz added a $2.2 billion crypto fund, Paradigm unveiled a $2.5 billion fund, and Hivemind Capital Partners announced a $1.5 billion fund. Katie Haun, who co-led a16z’s $2.2 billion crypto fund, has left the firm to launch her own crypto-focused fund.

Russell – a former journalist who previously had stints at TechCrunch, The Next Web, and The Ken – said Crypto.com is backing startups to help the ecosystem grow.

“If you’re in the industry, it’s in your interest to help companies grow in the ecosystem and the ecosystem itself to grow,” he said. (Worth pointing out that Solana, Avalanche, Polkadot — as well as some of their major investors — are also aggressively backing startups that are building applications for the native blockchains.)

The startups Crypto.com backs are under no obligation to list their tokens on Crypto.com over any of its rivals or offer the exchange any other preferential treatment, he said. The exchange team similarly doesn’t have a soft spot for the investment arm’s portfolio firms, he added.

(What’s up with the career move? “I’ve been crypto curious for a number of years but I wasn’t gasping to dive in full-time. This project appeals to me because Crypto.com is ambitious but yet it does things the right way. There’s certainly a lot of hype and hot air in crypto and web3 right now, but it’s impossible to ignore the talent that’s pouring into the industry,” he said.)

Crypto.com, which started its life as a blog of professor Matt Blaze (who sold the domain to the crypto exchange), has aggressively expanded in the past year as it looks to court more users. The Singapore-headquartered firm last year agreed to pay more than $700 million for the naming rights of the Staples Center in Los Angeles. The downtown Los Angeles complex has been rebranded as Crypto.com Arena for the next 20 years.

The firm, which bills itself as the “fastest-growing” crypto exchange, said at the time of the announcement that the move is positioned to make cryptocurrencies mainstream. Crypto.com, which processes trade volumes of over $2.5 billion every day, also teamed up with Hollywood star Matt Damon last year to promote the brand and cryptocurrencies.

The Damon-starring ad equated buying crypto tokens and NFTs to one of the greatest and boldest accomplishments in the history of humankind. Hyperbole, to be sure, but having the most mainstream American actor as Crypto.com’s celebrity sponsor has certainly helped bring the trading platform, and all that it sells, into the mainstream. The ad went viral and also attracted criticism for being cringeworthy.

Source: Tech

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Focused on smaller cities, Vietnamese social commerce startup Mio raises $8M Series A

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Mio, the Vietnamese social commerce platform, has raised an $8 million Series A, less than a year after announcing its seed round. The funding was led by Jungle Ventures, Patamar Capital and Oliver Jung, with participation from returning investors GGV, Venturra, Hustle Fund, iSEED SEA and Gokul Rajaram.

TechCrunch first covered Mio at the time of its $1 million seed funding in May 2021. Founded in 2020, Mio is a group buying platform that focuses on selling fresh produce and groceries in Tier 2 and 3 cities in Vietnam. The company is able to offer next day delivery because it built a logistics infrastructure that enables it to send produce directly from farms to customers.

The Series A brings Mio’s total raised to $9.1 million, and will be used to expand its logistics and fulfillment system, enter new areas in Vietnam and add new product categories like fast-moving consumer goods (FMCG) and household appliances.

Mio co-founder and chief executive officer Trung Huynh said that since TechCrunch first covered Mio seven months ago, it has achieved 10x gross merchandise value growth, a 10x increase in agents, or resellers, and grew its team from 60 people to 240. It now fulfills more than 10,000 pieces of fresh produce per day, operating in Ho Chi Minh, Thu Duc, Binh Duong, Dong Nai and Long An, with plans to expand into northern Vietnam.

The numbers “strengthened our conviction in this model and its potential,” he said. “We need fresh capital to accelerate hiring, product development and supply chain to keep up with the pace of growth as we deepen our presence in existing geographies and expand to new provinces.”

Mio is able to offer next day deliveries because its vertically integrated mayor layers of the value chain, including procurement, warehousing, order sorting and bulk delivery. The startup owns the majority of its logistics infrastructure and uses its own fleet of couriers. Its ability to delivery fresh produce directly from farms to customers in less than 16 hours contributed to higher customer retention and growth, Huynh said, and it will continue to shorten delivery times. .

Mio resellers are called Mio Partners. Huynh said one of the driving factors behind Mio is targeting the right people for the program, or “housewives and stay-home-moms in lower income regions who love sharing value-for-money products to their social circle of friends.”

They aggregate orders, usually from friends and family, and orders are delivered to them in batches for distribution. The startup claims Mio Partners can make up to $400 a month, including a 10% commission on each order and additional commissions based on the monthly performance of other resellers they referred to the program.

“There is a strong possibility” that Mio will expand beyond Vietnam, Huynh said, “but will only be considered at a more appropriate time after we successfully built our playbook for Vietnam.”

Source: Tech

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