Portland’s SheerID is trying to give web companies a secure and easy way to verify whether prospective customers belong to a special group, and it just raised $18 million to try and add more customers like Amazon and Spotify.
The new Series B round was led by Centana Venture Partners, with participation from existing investor Voyager Capital. SheerID has now raised $29.6 million to support its nearly 60 employees, with plans to add another 40 or so employees in 2018, said Jake Weatherly, co-founder and CEO.
SheerID built a verification system for companies that want to offer certain types of customers special promotions or features. The company’s technology allows Spotify, for example, to offer college students a discount by verifying that those who sign up requesting the discount are actually students, Weatherly said.
The company works with data holders that want to offer certain services based on eligibility — universities, the military, and other organizations that agree to participate — to accumulate data sources and verify new sign-ups on a web service against that data. It does that through a software-as-a-service platform hosted on Amazon Web Services, and will it work with customers to integrate the technology into their sign-up process on their own sites, he said.
“What we felt as we looked at all these different areas, from in-person (signups) to online to over the telephone to being mobile, is that there were a lot of broken attempts at solving the verification-of-eligibility question,” Weatherly said.
Fraud is a huge problem for a lot of SheerID’s customers; after all, on the internet, nobody knows you’re a dog. Dealing with fraud has forced many of those customers to make a decision between speedy services that get it wrong too often, and slow services that can throw a wrench into a potential customer’s sign-up process, Weatherly said.
“In an online digital business world, digital trust is critical,” said Sai Koppala, head of marketing for SheerID.
However, finding the data to accurately verify users is a job unto itself. The company has somehow signed deals with 97 percent of U.S. colleges and universities, Weatherly said, but SheerID has to build those data relationships with every new deal.
SheerID’s technology is used by a lot of large, prominent tech companies and organizations, including branches of the U.S. military and consumer goods companies like Target and The Home Depot. Customers purchase its services on a subscription basis, Weatherly said, with pricing tiers set by how many times those customers use its services, he said.