This week, mobile biometric startup EyeVerify announced the closing of a $6 million series A funding round, picking up a new strategic investor: Wells Fargo Investment Financial Services. Wells Fargo joins Sprint, Samsung and Qihoo 360 as strategic investors in the biometric company.
Peter O’Neill, president of Find Biometrics, had a chance to interview EyeVerify’s CEO and founder, Toby Rush, about the big news. The conversation begins on the topic of the company’s new investors, moves to talk of the vertical markets EyeVerify is targeting, touches on the death of the password and settles on what we can expect from the startup in Tampa at this year’s Global Identity Summit and Biometrics UnPlugged events.
Peter O’Neill (FB): It was recently reported that EyeVerify announced a funding initiative where Qihoo 360, Samsung and Sprint backed EyeVerify with combined six million dollar investment. The fourth player in this was actually not announced, can you tell us who that company is now?
Toby Rush (TR): Yes we are very excited to announce the fourth of our strategic investors and that being Wells Fargo. Wells Fargo has always been one of the leading innovative banks and they realized one of the ways they could get closer to new technology was by both investing and, as well, starting a program that allows them to partner more closely with start-ups. They looked at a number of different start-ups and sectors they were interested in, biometrics and authentication being one of those – and we had already been doing some work with them – and so it was kind of a natural fit. They introduced us to concepts and ideas, as they are an accelerator, as well as a direct equity investment. It just made sense for everybody.
FB: Why were these companies interested in investing in EyeVerify?
TR: I think a lot of the big companies realize that it is hard for them to be at the forefront of innovation with just their internal team, so the trend that you see across a lot of big companies is to venture out and begin to participate more closely with start-ups in areas that are strategic or important to them heading forward. So, when you look at our four investors strategically, they represent one of the largest smartphone manufacturers, one of the largest banks in the world, the third largest telco in the US and, in Qihoo, people don’t know them in the United States but, they are actually the world’s largest software security firm if you measure it by the number of users. They have over four hundred million mobile users alone! That’s a staggering amount. All these groups care about user authentication because the stronger the authentication that can be done with convenience, security and privacy, they are able to offer their services more boldly and in more creative ways.
FB: When I look at the companies that are involved with this investment it really does seem like the perfect fit for your company, it is almost like you handpicked these particular companies to participate with this.
TR: They are amazing from so many different angles. It is great to have someone who is wanting to use your product also want to invest in the company and get a lot closer. It is a huge validation. You move from being a vendor to a partner. So from just a simple operational perspective it is hugely important. When looking at external validation again you’ve got some of the biggest players in the space saying: “Hey, these guys are doing something right,” and we’re going to treat them more as a partner and a close ally versus just another vendor. So when you look at all of those different components coming together these are great strategic partners to have in every sense of the word.
FB: This must really assist your speed to market plans by having partners like these?
TR: Absolutely, because they are deploying themselves and also just making introductions and even helping us to understand how to work with them. Wells Fargo in particular has been great. They realize they are a huge monolithic bank and as a young small company it is hard to understand where to even begin working with an entity that large so they have been great about here is the process, you have to have enterprise application on board, you have to have security on board, you have to have policy groups on board because we are dealing with biometrics and where it is stored and so is really laying out the process and who has to be on board even before the business unit can even think about buying your product. So those are things that would take months or quarters to figure out on your own and they are calling the meetings for us and pushing them forward.
FB: When we last spoke in January we were talking a little bit about some of your vertical market focuses and financial was definitely one of those. We have seen tremendous activity in the financial community around biometrics, especially with getting rid of the password, which we all know now is a significant challenge but also something that has to happen quickly. What other vertical markets are you focusing on beside financial at this point?
TR: We break this into two broad categories. There are kind of large software platforms that value strong authentication and then there are three markets inside that software platform realm. One of those is financial services, one of those is healthcare and the other is enterprise data or BYOD. So, when you think about it as consumers, the things that we do on our phone that we think are sensitive would be accessing sensitive data, would be accessing a company’s data, accessing our own financial data and accessing our own healthcare records. Those are the three markets we are looking at from a software platform perspective and then we are partnering with some of the largest software platforms in the market to bring our product to the masses. That is one thrust.
Pivotal to us is working directly with OEM’s. There is obviously a huge move, fingerprints predominantly thus far, but so many of them are interested in the eye. You have to look at your screen at some point of the process. You already have the optics that are there, our price point is quite literally one tenth of the cost of fingerprint sensors so the cost differential just from a pure hardware cost is huge. There is much less engineering, the effort if you have to add it to hardware where you put it. So there is really keen interest on being able to use this visibly at the OEM level as well.
FB: It is interesting that you were talking about the healthcare area. Dr. John Halamka, from the Harvard Medical School, made it very clear in our Biometrics UnPlugged event last year. He talked about how he has all these devices in his network and he didn’t purchase a single one of them. The big question was How does he control all of that activity? and your solution would certainly go a long way in assisting an area like that.
TR: Yes, that is a great point. Hospitals want to share data. That just makes sense from doctors, to patients, to other care givers. When people are able to access data seamlessly, quickly, accurate data at the point of need everything works better. But there is a very real need for privacy and security so I think one of the missing links at the biometrics industry – and obviously we are trying to be a major player in that – is how do we make that authentication process very convenient, very secure and yet very private.
FB: With regards to the investment, did your existing investors also participate in this new round?
TR: Yes they did, so we had preservation from existing investors and then the four new investors.
FB: What will the funds be used for?
TR: A lot of that is sales and marketing, so we have a product that is in production today that we will continue to push into those markets. We have OEM on a next generation product. Our R&D pipeline is a mile long. There are so many things that we want to do to make it faster and more robust and easier so we will continue to work on all those things and next generation products as well as advancing the market adoption.
FB: I understand that you will be exhibiting at the Global Identity Summit in Tampa next month mid September. What will your focus be at that event? What will you be showing?
TR: We are going to show off a couple of things. We have been there twice now. Two years ago we had a really crude prototype and people were like: “Wow that is fascinating but we need to see if you can actually make it work on these little 1 megapixel cameras”. Last year when we came we had some really great progress on that front facing camera and what you are going to see when we come this time is really a very clean, very fast, very robust user interface on tablets. An area that the biometrics industry will actually understand is when we do matching we actually match within the encrypted space. We take a template, we encrypt it to the device so it never leaves the device and then we do matching within the encrypted space which nobody else is really doing and then on top of that we are also generating a 512 bit key from the biometric. So we never send any piece of the biometric to any of the host applications. Matching in the encrypted space as well as generating these long high entropy keys and a software only biometric that is convenient, secure and private.
FB: That sounds like an ideal solution given some of the privacy concerns being voice by the ACLU etc.
TR: We have a really, really strong solution for that. Our biometric is completely revocable because we populate a key and the key is what we hand off to the host application all you have to do is revoke that key and that set of enrolments is no longer valid. The user can reenroll. The core biometric is never exposed.
FB: We’ve been talking about the death of the password at Mobile ID World for over a year now both the IBIA and FIDO are also pushing for this change. How fast do you think this desperately needed shift away from passwords will occur?
TR: I think you will see that the tip of the spear, which is a pretty big tip and a pretty big spear, will be mobile. I think because you have so many sensors and so many capabilities on mobile that you will see smart phones and tablets definitely tip first but the challenge is that you are going to have a lot of old school desktops for a really long time. And I still think passwords for the most part are going to be the way old school desktop computers are going to be accessed for some period of time. I think an innovation that you will begin to see – and it is already happening in a couple of places – is that your phone can authenticate to your laptop. Your laptop has Bluetooth, we have other ways of wirelessly communicating, so if you have biometrically authenticated into your phone, your phone then will log you into your PC. Laptops have it and smartphones I think will be kind of the tip of the spear, but I think because we have had passwords around for a while the legacy equipment that we have out there isn’t going to go away overnight.
FB: Finally in summary can you review for us your eyeprint advantage for our readers?
TR: The eyeprint ID is first and foremost a software element. So we don’t need any extra hardware. We can need as low as 1megapixel camera on the existing device so from a scale perspective you already have all of the hardware that you need. The fingerprint, the eyeprint and other biometrics are all trying to achieve the same thing. One is convenience and one is security and one is privacy and I think we do all three of those incredibly well. In particular face and voice have really struggled with both accuracy as well as privacy as they tend to send all of their information to the cloud. We tend to think there is a huge shift moving away from the cloud and to device level authentication. I think being purely software yet doing device level authentication matching in the encrypted space, generating a key and just the usability. We have so much headroom to grow and get faster and better and even more convenient and more seamless. The direction of where biometrics are heading I think the eye based biometrics is one of the keys.
FB: Congratulations on your funding news and I look forward to you participating in our event Mobility at the Crossroads of Commerce and Privacy. You fit right into the heart of that topic and it is a very important one for the identification industry. It is absolutely spectacular the four companies that are involved with you and I really look forward to seeing what is coming next from EyeVerify.
TR: Thanks Peter. I really appreciate the time and all the work that you guys do and we are excited as well.