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Socure, a New York-based startup that provides digital identity verification and fraud prevention solutions, has announced its first acquisition: Berbix, a San Francisco-based startup that developed a high-accuracy document verification solution. The deal, valued at 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 has 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 bar in accuracy, speed, user experience, and fraud reduction, far outpacing market competitors.
In an exclusive interview with VentureBeat, Socure CEO Johnny Ayers explained the strategic rationale behind the acquisition and the launch of DocV 3.0. He said that Socure wanted to “definitively enable the highest number of true accepts of anyone” and “stop the most amount of false accepts” in the identity verification space. He added that Berbix was “head and shoulders above” other vendors in terms of performance and speed, and that combining their technology with Socure’s rich data and risk signals would deliver “stunning results.”
“The proliferation of fraud is a significant challenge, and we see AI as a key tool in combating it,” Ayers said. “Our goal is to help businesses protect themselves and their customers from the increasing risks of identity theft, account takeover, and other forms of fraud.”
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Fighting fraud with better identity verification
Ayers also shared some of the metrics that demonstrate the improvements that DocV 3.0 offers to Socure’s customers, which include four of the top five banks, leading card issuers, and more than 400 of the largest fintechs. He said that DocV 3.0 delivers:
- Increased fully automated decisioning by 14% — DocV 3.0 delivers 94% auto decisioning versus an industry standard of 80%
- Increased first-attempt auto approvals of good consumers by 26% — DocV 3.0 delivers a 90% approval rate of good consumers versus an industry standard of 64%
- Increased fraudulent document capture by 27% — DocV 3.0 accurately captures more than 83% of all fraudulent documents versus an industry standard of 56%
- Increased speed to decision and user experience — DocV 3.0 delivers accurate, fully automated conclusive results in less than 4 seconds versus a range of 6-75 seconds found in the market
Ayers said that these improvements translate into millions of dollars in revenue and savings for Socure’s customers, as well as a better customer experience and a competitive edge. He also said that DocV 3.0 can be used as a solo solution or as part of Socure’s identity platform, which includes email risk, phone risk, ID & synthetic ID fraud, AML, bank account verification, and more.
“The proliferation of fraud is a significant challenge, and we see AI as a key tool in combating it,” Ayers told VentureBeat. “Our goal is to help businesses protect themselves and their customers from the increasing risks of identity theft, account takeover, and other forms of fraud.”
“There’s no doubt that the rise of deep fakes has contributed to the escalation of fraud,” Ayers added. “However, we’re also leveraging AI to detect and prevent these sophisticated attacks more effectively than ever before.”
New opportunities unlocked with the acquisition
The acquisition of Berbix opens up new opportunities for Socure to expand into new markets and geographies. Ayers said that Berbix has more than 50% of its business outside of the US, and provides global coverage of ICAO-compliant travel documents, passports, and national ID cards. He also said that 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 marketplaces.
Ayers said Socure’s recent acquisition will allow the company to provide a more comprehensive suite of solutions to its customers, while also 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 such as 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 U.S. Federal Trade Commission (FTC) reports a 30% YoY increase in consumer fraud losses in 2022, and the U.S. government infamously saw $700 billion in fraud losses since the start of the pandemic.
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