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Socure Nabs Unicorn Status With $1.3B Post-Money Valuation 

This Tuesday, Socure announced they had completed a $100M Series D funding round; Socure’s latest financing round was led by Accel, with participation from existing backers Commerce Ventures, Scale Venture Partners, Flint Capital, Citi Ventures, Wells Fargo Strategic Capital, Synchrony, Sorenson, Two Sigma Ventures and others. Using AI and Machine Learning, Socure enables companies to verify identities in order to validate users and security online.

Why this transaction?

The York IE team chose this as our transaction of the week to once again discuss the unprecedented push towards digital adoption accelerated by the COVID-19 pandemic. Previously, Socure had focused its efforts within the financial services industry; as has been the case for many others, the pandemic created new opportunities for Socure who recently announced they would be expanding into other consumer-facing verticals such as healthcare, gaming, e-commerce, on-demand services and more. Projected to reach $30B by 2023, the global identity verification market has experienced massive growth in a short time-frame as more companies continue to adopt digital-first online services. We expect to see retail and e-commerce verticals to experience the fastest growth as both sectors have actively implemented digital identity verification tools to enhance user experience and minimize potential fraud/security risks.

Socure successfully raised a $35M round just six months prior to their most recent raise; after experiencing customer growth of 85% in 2020 and a 50% increase in headcount, the company announced it would begin directing new capital towards expansion efforts into markets similar to the ones listed above. With a proven track record in financial services, the company is now turning to more consumer-based markets, hoping to replicate the success of its predictive analytics platform. Given general consensus, we expect the verification identity market growth to be long-lasting as digitization is expected to increase across industries for the foreseeable future. Socure’s proven track record, predictive analytics platform, and unicorn status puts them in a unique position to capture additional market share as this market continues to see rapid expansion.

Growth In Identity Management

Given market growth projections for the identity verification industry, the York IE team decided to compile data for Identity Management companies that have raised capital in the last ten years. Below we provide the results of our data compiled from the Fuel Platform which paints a very convincing picture:

As you can see from the graph above, the industry experienced massive growth in the last 18 months, with over $1.3B invested in the peak year of 2019. As we continue to experience wide growth adoption of e-commerce and digital transactions, we expect to see similar and potentially greater growth in this industry moving forward. With the pandemic being a watershed moment for the identity verification market, companies with pre-developed tools and established market share should expect to see growth as many sectors begin requiring their services/tools.

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