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Socurea New York-based startup providing solutions for digital identity verification and fraud prevention, announced its first acquisition: Berbix, a San Francisco-based startup that has developed a highly accurate document verification solution. The deal, worth approximately $70 million in cash and stock, marks a significant milestone for Socure as it aims to become the leader in the identity verification market.
According to a company blog post announcing the acquisition, Socure also launched its Predictive Document Verification (DocV) 3.0 solution, which integrates Berbix’s technology with Socure’s existing platform. The new solution claims to set a new standard in terms of accuracy, speed, user experience and fraud reduction, far outperforming competitors in the market.
In an exclusive interview with VentureBeat, Socure CEO Johnny Ayers explained the strategic rationale behind the acquisition and launch of DocV 3.0. He said Socure wanted to “permanently allow as many true sign-ins as anyone” and “block as many false sign-ins” in the identity verification space. He added that Berbix was “a cut above” other vendors in terms of performance and speed, and that combining their technology with Socure’s rich data and risk signals would produce “amazing results.”
“The proliferation of fraud is a significant challenge and we see AI as a key tool to combat it,” said Ayers. “Our goal is to help businesses protect themselves and their customers from the growing risks of identity theft, account theft and other forms of fraud.”
Fight fraud with better identity verification
Ayers also shared some of the metrics demonstrating the improvements DocV 3.0 offers to Socure’s customers, which include four of the top five banks, major card issuers and more than 400 of the largest fintechs. He said DocV 3.0 offers:
- Increased Fully Automated Decision Making by 14% — DocV 3.0 offers 94% automated decisions versus an industry standard of 80%
- 26% increase in automatic approvals on the first attempt of good consumers: DocV 3.0 offers a 90% approval rate of good consumers compared to an industry standard of 64%
- Increased fraudulent document capture by 27% — DocV 3.0 accurately captures over 83% of all fraudulent documents compared to an industry standard of 56%
- Improved decision speed and user experience: DocV 3.0 provides accurate and fully automated final results in less than 4 seconds compared to 6-75 seconds found on the market
Ayers said these improvements translate into millions of dollars in revenue and savings for Socure’s customers, as well as improved customer experience and competitive advantage. She also said that DocV 3.0 can be used as a standalone solution or as part of Socure’s identity platform, which includes email risk, phone risk, ID fraud and synthetic IDs, anti-money laundering, bank account verification, and more.
“The proliferation of fraud is a significant challenge, and we view AI as a key tool in combating it,” Ayers told VentureBeat. “Our goal is to help businesses protect themselves and their customers from the growing risks of identity theft, account theft and other forms of fraud.”
“There is no question that the rise of deep fakes has contributed to the escalation of fraud,” Ayers added. “However, we are also leveraging artificial intelligence to detect and prevent these sophisticated attacks more effectively than ever before.”
New opportunities unlocked with acquisition
The Berbix acquisition opens up new opportunities for Socure to expand into new markets and geographies. Ayers said Berbix holds more than 50% of its business outside the United States and provides global coverage of ICAO-compliant travel documents, passports and national ID cards. She also said Berbix has customers in new verticals and use cases for Socure, such as telehealth, remote workforce, ride sharing, high-risk financial services, alcohol and cannabis purchases, and two-sided markets.
Ayers said the recent acquisition of Socure will enable the company to provide a more comprehensive suite of solutions to its customers while expanding its global footprint. This move is likely to strengthen its position in the industry and further solidify its reputation as a leading provider of identity verification and fraud prevention solutions.
Socure was founded in 2012 by Ayers and Sunil Madhu (who left the company two years ago) and has raised over $740 million in funding to date from investors including Accel, T. Rowe Price, Bain Capital Ventures, Tiger Global , Commerce Ventures, Flint Capital, Two Sigma Ventures and others. The identity verification market is expected to grow rapidly as more consumers and businesses move online and face increasing risks of fraud and identity theft. The United States Federal Trade Commission (FTC) reports a 30% year-over-year increase in consumer fraud losses in 2022, and the US government has famously seen $700 billion in fraud losses since the beginning of the pandemic.
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