New York-based digital identity verification firm Socure closed a $450 million round at a $4.5 billion valuation as more companies go digital and fraud escalates.
Subscribe to the Crunchbase Daily
The new Series E was led by Accel alongside the funds and accounts advised by T. Rowe Price. It also includes two new investors, Bain Capital Ventures and Tiger Global, and participation from existing investors Commerce Ventures, Scale Venture Partners and Sorenson Ventures.
The round comes just seven months after Socure closed a $100 million Series D at a $1.3 billion valuation. Founded in 2012, Socure has raised a total of $646 million to date, according to the company.
The company’s Socure ID+ platform is used by banks, credit card providers, fintech and crypto companies, and other enterprises to verify identities and reduce fraud. The ability for companies to know if customers are real and spot fraud has become even more important as more businesses digitize and e-commerce grows.
“In the last two years, there’s been tremendous e-commerce growth, and fraud has grown at the same rate,” said Johnny Ayers, Socure’s founder and CEO. “We are seeing a shift to digital. We see this shift sustaining over a long period of time.”
The pandemic, as well as other changes in lifestyle, have forced not just more transactions online, but also higher dollar ones. While the market for e-commerce and electronic payments is trending up, fraud could be the one thing that could restrict its growth—making platforms like Socure’s a needed part of the underpinning of the internet, said Andrew Davis, director of private placements in the U.S. equity division at T. Rowe Price.
“What is needed is internet and e-commerce infrastructure that creates more trust,” he said.
Ayers added that while Socure has certainly been helped by the digitization of commerce, its platform also is used by point-of-sale vendors and bank branches.
“The move to digital is large in terms of tailwind, but it’s not the only thing,” he said.
Whatever wave Socure is riding, it is definitely leading to growth. The company has eclipsed triple digits in bookings run rate and has realized five consecutive quarters of record year-over-year revenue growth, said Ayers. The company also has increased employee headcount from 150 at the start of the year to 400 now. The company expects to be at 1,000 by the end of next year.
The new funding will be used for both headcount expansion and moving into new emerging verticals and financial risk, Ayers said.
The digital commerce protection and fraud space has been active this year. San Jose, California-based Signifyd raised a $205 million Series E that valued the company at $1.34 billion in April.
Aside from startups, Ayers said there are also large companies Socure goes head-to-head with, including credit reporting service Experian, LexisNexis and identity verification provider Jumio. Despite that competition, Ayers said he sees a significant opportunity to build a large, long-standing company.
“We can and will be a core part of the infrastructure of how identity is secured across the internet,” he said.
Illustration: Dom Guzman
Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.