Footprint’s platform helps companies reduce
fraud and friction in verifying identity at creation and
log-in
Footprint, a company that unifies KYC (Know Your Customer),
security and authentication to automate consumer onboarding and
reduce identity fraud, today announced a $13 million Series A led
by QED Investors. The round included participation from existing
investors Index Ventures, Lerer Hippeau, Operator Partners,
BoxGroup, Palm Tree Capital and Definition. New investors Neo and
Animal Capital also participated.
The funding will be used to double down on the Footprint
product, providing the highest fidelity verification for people
today and ways to utilize identities within Footprint tomorrow.
This includes expanding the breadth and depth of the Footprint
offering. Footprint will launch its fraud suite and expand the
number and types of identification consumers can use to verify,
including credit bureau data, pay stubs and vehicle data. The
funding announcement coincides with the launch of Footprint
Connections, a tool to connect its customers to each other to
leverage the portability created within the platform.
“Core to Footprint is a new philosophy around who fraud and KYC
companies should be trying to identify,” said Footprint CEO and
co-founder Eli Wachs. “Companies look to screen out bad actors but
there are an infinite amount. In a new age of GenAI, fraudsters
have even more tools to mass-create an abundant amount of
authentic-seeming identities.
“We needed a new approach – one that labels good actors – so
Footprint created a centralized network of authentic, de-duplicated
identities. Now we can narrow the scope of who is in a pre-vetted
field, leaving fraudsters less room to hide.”
Today, product and risk teams at companies face a familiar
tradeoff between fraud and friction. In the past, the best way to
reduce fraud was to add friction to the onboarding experience, but
increased friction may deter some authentic users. By contrast,
companies that over-optimized for conversion with lower friction
risked higher potential fraud losses over time.
This is because current point solutions are not able to
fundamentally address the root problems. Existing backend KYC tools
are unable to actively assess behavioral risk – for example,
whether a name or social security number was copied and pasted into
a form. A fraud detection tool may be able to pick up those red
flags, but it has no capability to challenge the user by asking for
additional documentation to verify their identity.
Footprint combines these tools in one product, using
“components” to unify KYC, authentication and fraud into a single
rules engine for account creation and sign-in.
Components are UX elements that can be customized to collect
onboarding information. This can include a name, date of birth,
address, social security number or document scan. Footprint can
dynamically prompt users to collect additional documentation at the
time of account creation or when they sign back in. Additionally,
Footprint makes identity “portable.” This creates an Apple Pay-like
experience for consumers when they visit a second application that
uses Footprint, meaningfully reducing friction for companies and
users over time.
Footprint is built on several key pieces of technologies:
- Extensible decision and rules engine connected to large
identity datasets, enabling customers to create automatic step-ups
to improve verification and conversion rates with no-code
- Cutting-edge document and selfie verification flow built on
native AppClip/InstantApp user experience to create delightful
native user experiences and verify the authenticity of the device
capturing the document or images
- Passkeys meant to bind a biometric to PII to prevent ATOs and
phishing
- Powerful vaulting infrastructure powered by AWS’s secure
computing environment (Nitro Enclaves), ensuring customer data is
collected securely and kept private
Footprint was founded in 2022 by Eli Wachs, a Stanford MBA
graduate who has been starting companies since high school, and
Alex Grinman, who studied CS, math and cryptography at MIT having
previously started KryptCo, a mobile auth company that was acquired
by Akamai.
Since launching its enterprise platform last fall, Footprint has
seen impressive growth from its customers spanning financial
services, auto and real estate. One customer saw Footprint’s
dynamic onboarding tool boost its completion rate by over 50%.
Another was able to leverage Footprint to catch an extra 3,000
cases of fraud within the first six months. The company has also
signed partnerships in banking, including with both Treasury Prime
and Apiture.
“The idea of portable identity is not new,” said Alex. “But
building portable identity really means creating a rules engine
that can run on top of secure vaulting and strong authentication.
To me, this level of technology was not economically feasible for a
startup to build before the release of Nitro Enclaves, which AWS
released at the end of 2020. Meanwhile, the FIDO2 alliance agreed
on a standard for private and secure auth–what Apple calls
passkeys–in Q4 of 2022. This was the final missing piece we saw
coming to let us build portable identity.”
Footprint believes creating the trusted network of verified,
portable identities will meaningfully grow the market. Their first
productization of this vision is with Footprint Connections, a tool
to connect its customers to each other to leverage the portability
created within the platform.
Fraud, friction and data breaches represent billions of dollars
of losses to companies each year. Companies in the U.S. and Canada
spend $61 billion a year on technology for financial crime
compliance, with close to 80% of companies seeing KYC-specific
costs go up over the past year. Despite this spend, 42 million
consumers in the U.S. face identity fraud.
This is somewhat unsurprising when considering the frequency of
data breaches – more than 360 million users had records breached in
2023, according to a public data breach tracker created by The
Independent. While traditionally banks were the main institution to
run KYC checks, the market has grown substantially as more
companies move online and face potential issues stemming from fraud
and trust. This includes online marketplaces for items such as
homes, cars or luxury goods, rental applications and even vertical
SaaS companies.
“Sharable identities have been the center of financial services
discussions on KYC for over a decade, but technological hurdles and
business model flaws have prevented previous attempts from getting
traction,” said QED Investors Partner Amias Gerety. “Footprint
leverages the latest industry standards with a business
architecture that bakes portable identity into its core, while
seamless integration puts business users in the driver’s seat on
both fraud and KYC performance. We've never seen a company whose
value prop resonated so well with both early stage fintechs and
late-stage enterprise platforms."
About QED Investors
QED Investors is a global leading venture capital firm based in
Alexandria, Va. Founded by Nigel Morris and Frank Rotman in 2007,
QED Investors is focused on investing in disruptive financial
services companies worldwide. QED Investors is dedicated to
building great businesses and uses a unique, hands-on approach that
leverages its partners’ decades of entrepreneurial and operational
experience, helping companies achieve breakthrough growth. Notable
investments include AvidXchange, Betterfly, Bitso, Caribou,
ClearScore, Current, Creditas, Credit Karma, Flywire, Kavak,
Klarna, Konfio, Loft, Mission Lane, Nubank, QuintoAndar, Remitly,
SoFi, Wagestream and Wayflyer. Learn more about QED Investors at
www.qedinvestors.com.
About Footprint
Footprint is a New York-based technology company built to help
banks, marketplaces and fintechs onboard their users. To learn more
about Footprint, visit https://www.onefootprint.com/. Follow
Footprint on social media on Twitter and on LinkedIn.
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