Facial recognition technology has suddenly become very controversial.
Both International Business Machines (NYSE:IBM) and Amazon (NASDAQ:AMZN) recently limited their use of the technology in the United States, fearing its abuse by police. The Electronic Frontier Foundation calls it especially bad at recognizing African Americans.
This makes it ironic that one of the hottest young companies in insurance technology is Trust Stamp, which builds biometric templates against fraud.
Trust Stamp Review: The Background
Trust Stamp was launched through the Advanced Technology Development Center at Georgia Tech in Atlanta, and the MasterCard (NYSE:MA) Start Path accelerator in 2018. Synchrony Financial (NYSE:SYF), a major credit card issuer, was another early backer.
Governments and financial companies all have trouble with identity. Personal identifiable information (PII), like Social Security numbers, isn’t supposed to be collected or sorted, and it can also be faked. Trust Stamp gets around this with biometrics.
Trust Stamp separates biometric data into 128 metrics. It converts this into what it calls a unique, non-reversible identifying sequence called an “Evergreen Hash” or EgHash. Each EgHash acts as “digital DNA,” which Trust Stamp calls more unique than a fingerprint. It’s also a form of tokenized identity computers can store. Because it can’t be reverse engineered, the EgHash is not considered PII and can be stored on a public or private database. You can also share it.
One early test case of the EgHash came in 2018, a system created with law enforcement to identify victims of cross-border human trafficking. Another early project is ID4Africa, which was used to test the reliability of the EgHash technology.
Who’s Behind Trust Stamp?
CEO Gareth Genner is an interesting story all by himself.
He is a British lawyer and president of a Catholic college, as well as a serial entrepreneur. He launched Trusted Mail, which uses biometrics to secure email, in 2017. Before that he launched Edevate, which uses online courses to create “micro degrees,” in 2011.
Andrew Gowasack is the technology guy and has been working on Trust Stamp for almost five years, building a team of about a dozen young developers. There are a total of 47 employees.
Money Keeps Coming
Now Trust Stamp is raising money from all directions, hoping to become a de-facto standard before competitors can launch. Its investor presentation claims that biometrics will help authenticate $2 trillion in transactions by 2023. With authenticators securing about 0.5% of that revenue, that’s a $10 billion market.
Trust Stamp got $100,000 in startup capital from OnRamp. It has done a standard Series A funding round with over $1 million from MasterCard and other investors. It has also raised almost $3.2 million through SeedInvest, and hopes to raise a total of $5.6 million there.
The next step is a public offering. Trust Stamp plans a float of 29 million euros, about $32.4 million, on the Euronext Dublin exchange as early as September. The company has also launched a new research facility in Malta, backed by a government grant.
Trust Stamp would be the first IPO done by Euronext Dublin this year.
The Bottom Line
Trust Stamp is an all-or-nothing deal. If it succeeds, Trust Stamp becomes a standard that can make a ton of money. If it can’t get scale, the company could be out of business within a very short time.
Trust Stamp faces a host of competitors like Okera, BridgeCrew, Robust Intelligence and Manetu, all working around problems of identity, security and the use of artificial intelligence.
It could fail, but it could work. You’ll know within two or three years.
Dana Blankenhorn has been a financial and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AMZN and IBM.
