The Identity Startup Landscape
This post as well as the attached Identity Startup Landscape were created as a collaborative effort between One World Identity, RegTech Lab, Michael 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.
We have defined 7 segments and identified 187 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:
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
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.
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.