10

Feb

2017

The Identity Startup Landscape

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I am proud to have collaborated on this Identity Startup Landscape article. Digital identities are one of the cornerstones of the Digital Age and accordingly, I expect a vibrant ecosystem where entrepreneurs, incumbents, investors, regulators, legislators and standards bodies will create the identity frameworks of tomorrow.

This post as well as the attached Identity Startup Landscape were created as a collaborative effort between One World IdentityRegTech LabMichael Meyer and Pascal Bouvier. (Special thanks to Emma Lindley)

Identities are primary and central to virtually everything in the world.  Each person, place, thing, and entity has its own unique identity.  For example, with an assured physical identity, a person can own something, vote for someone or something, and access goods and services.

In the real world, physical identities have always been paramount.  Face to face meetings with bankers, wet signatures for contracts, or even a handshake were important parts of our economy and operating system.  But for distant transactions, how could one verify that the desired person was actually making a transaction?  Correspondent Banking and Trade Letters of Credit were early solutions.  The advent of electronic communications enabled wires: SWIFT was created etc. Together, these systems sped up the rate at which funds could be moved, significantly reducing settlement risk. However, the burden of other types of counterparty risk has not gone away. The systems were cumbersome but worked.  And then the internet and its interminable need for passwords…

All of these use cases rely on identities.  If an identity is known and verifiable, a transaction can move forward.  If not (ie “forgot password”) then the process grinds to a halt.

As we all know, the current Identity Management schemes are insufficient.  We are now moving, at near light speed, into a digital first world.  Therefore, DIGITAL IDENTITIES are a fundamental requirement of our new world. However, for identity, translating from the physical world to the digital one is not a simple process; we need innovation to make it happen.

OWI is building a business around defragmenting identity and its myriad requirements.  RegTechLab believes that Identities are a critical regulatory challenge and opportunity.  Michael and Pascal, as FinTech/RegTech investors are focusing on identity innovations.  Together, we have worked as a team to build a database of identity companies as well as a scheme to help us understand the market structure.

The identity space is maturing into an industry in its own right with substantial, well established companies attempting to offer solutions – see OWI’s Identity Industry Landscape.  But the very nature of identity, its plasticity, how it is assured, how it is verified and provisioned, managed and monitored is being challenged as we enter the digital age. We are seeing a new world of digital identities being formed, partly nudged by governmental entities, partly built by free market forces, meshing with existing identity infrastructures in developed economies and springing out of nowhere in emerging markets.

Identity in general, and digital identity in particular, is of central importance to the future of trust, data privacy, cybersecurity, commerce, payments and individual affirmation in both the physical and digital worlds. We believe that this important sector will evolve slowly at first, and then rapidly all at once. In order to understand innovation at the edge, we set out to complement OWI’s Identity Industry Landscape which focused on established players by building an Identity Startup Landscape focusing on early stage companies.

Screen Shot 2017-02-08 at 11.56.07 AM

We have defined 7 segments and identified 189 identity startups. We grouped these startups according to their known main use cases even if some of them may overlap across more than one segment.

The seven segments are:

– Attributes: Point solutions designed to prove and/or verify identity or identity attributes of people.

– Authentication/Authorization: Point solutions designed to authenticate users, or authorize users for specific use cases or thresholds.

– Identity Access Management (IAM): enterprise grade access management software (may include governance and rights management, more than point solutions, may be delivered as a client/server solution or cloud based). This segment is the historical and traditional segment for identity solutions.

– Digital Identities: next generation digital identity solutions (built from the ground up for the digital world)

– Identity of Things: Identity solutions for things – connected or not – and assets.

– Monitoring: Solutions that address fraud or deliver fraud prevention, meet certain AML/KYC compliance thresholds and mandates, assess behavioral or transactional risks. Solutions that address on-going management of identities.

– Technology Providers: Technology solutions – enabling or building blocks – to one or more segments of the identity landscape.

The 187 identity startups breakdown as follows:

Screen Shot 2017-02-08 at 11.57.44 AM

We will watch this space closely as it is currently in flux. We expect many more new entrants over the coming year, especially in the Digital Identities and Identity of Things segments. As with every ecosystem, a fair amount of changes and pivots for many of the startups listed. It should be noted that not one day goes by without us adding a new startup to this list.

In a follow up blog we will analyze major trends within this landscape, potential convergence between the startups in this landscape and the incumbents in OWI’s Identity Industry Landscape, as well as a funding analysis to date for all startups.

Click here for the PDF version: RegTechLab_OWI_Identity Startup_Landscape_February 2017

In the meantime, should you know of new startups entering this space, do not hesitate to contact us at: info@regtechlab.io or info@oneworldidentity.com

 

About One World Identity:
One World Identity is a team of identity experts driven by a desire to create a neutral platform for leaders in the industry to collaborate, connect, and learn. Its debut event, the K(NO)W Identity Conference, will bring 150 speakers to Washington D.C. May 15-17, 2017.

About RegTechLab:
The RegTechLab is an innovation center that incubates, accelerates, and tests emerging financial technologies focused on solving Regulatory Requirements problems in financial services. We offer a global service for regulators, financial services companies, technology solution providers, and interested stakeholders that includes networking, advisory services, and use case testing. The RegTechLab will officially launch in Washington D.C. towards the end of the first quarter of 2017.

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Pascal Bouvier
pgb2008@gmail.com

Life and work experiences have given Pascal an unmatched vantage point, seeing things as both venture capitalist and aspiring entrepreneur. He currently is a Venture Partner with Santander Innoventures – Santander Group’s Global Fintech fund.

7 Comments
  • Jens Farvig
    Posted at 09:32h, 12 February Reply

    Great read. Maybe we at deemly fall a bit outside these segments. We do use users social accounts for ID verification, but we’re trying to say something about how you are as a person in stead of “not just” who you are by letting them aggregate their reviews and ratings from sharing economy platforms.

    I’d love to hear your thoughts on how we would fit in the landscape you presented.
    My own guess would be ‘Digital Identities’ since you have eRated here.

    Again thanks for an interesting read.

    • Pascal Bouvier
      Posted at 10:49h, 19 February Reply

      thanks and you are probably right. name of company?

  • Ofer
    Posted at 02:58h, 14 February Reply

    Hi Pascal,

    Very interesting approach for mapping the market.

    I’m kinda puzzled why the company that powerd Paypal and other majors with the ONLY 2nd generation ID authanteication and onboarding today… is missing.

    Strongly advise to have a look at http://www.au0tix.com, the AU10TIX blog, and catch up.

    Ofer

    • Pascal Bouvier
      Posted at 10:48h, 19 February Reply

      One World Identity (OWI) published an Industry Identity Landscape with all incumbents in the space. They might have been added to that landscape and deemed not a startup anymore. This landscape I built with OWI only includes startups.

  • Oliver Naegele
    Posted at 07:53h, 23 February Reply

    Hi Pascal,
    count us in as we have the most advanced technology in that sector and are already in POC state with companies. If you are interested, I would like to give you an insight into our project.
    Thx
    Oliver

  • Susan M
    Posted at 09:33h, 31 July Reply

    There are many companies in there that are not startups – Ping, Digidentity, and Forgerock spring to mind. For that reason seems strange to have missed our company as we have a Universal Identity API that connects all of the dots, from data stores to IdPs to identity hubs – this is innovation around the practical needs of consumer identity: For our latest recipe based identity approach check out: http://www.csoonline.com/article/3211543/identity-management/the-road-to-apiness-in-customer-identity.html

    • Pascal Bouvier
      Posted at 13:58h, 07 August Reply

      thank you for your comments. will amend next version accordingly.

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