BlockScore said Thursday that it has secured $2 million in seed funding. The investors included Battery Ventures, Khosla Ventures, Lightspeed Venture Partners, New Atlantic Ventures, Boost VC and Y Combinator. The capital will be used for product development and sales expansion. BlockScore is a provider of ID verification and anti-fraud solutions for online businesses.
MENLO PARK, Calif., June 26, 2014 – BlockScore, maker of innovative identity-verification and anti-fraud technology for online businesses, has raised $2 million in seed financing from a group including Battery Ventures, Khosla Ventures, Lightspeed Venture Partners, New Atlantic Ventures, Boost VC, Y Combinator and several angels. BlockScore intends to use the new funds for product development and sales expansion.
Founded in 2013 by Alain Meier, John Backus and Christopher Morton, the company provides advanced, API-level access to verify users’ identity information across several public and private databases and criminal watch lists. In contrast to legacy vendors, whose products take months to implement, require large upfront fees and involve complex legal contracts, BlockScore’s service can be implemented in a day with no upfront fees.
“Online businesses that attract illegal or fraudulent activity—such as financial institutions, marketplaces and those leveraging the “sharing economy”— greatly benefit from BlockScore because they can now instantly verify a customer’s identity and authenticate that the owner of the identity is providing the information,” said Morton, BlockScore’s president. “This provides a method far superior to requesting photo IDs, utility bills, bank statements and leases.”
In addition to reducing fraud, BlockScore also helps companies that are required to comply with “Know Your Customer regulations”, which mandate that they verify the identity of customers before engaging in financial transactions.
BlockScore customers choose between several service plans. They include a pay-as-you-go offering with no monthly fee, and a high-volume plan with fees as low as $0.80 per verification. BlockScore’s aggressive pricing and ease of implementation has helped the company grow its customer base by 200% in the past month alone. Research firm Research and Markets estimates online fraud detection is a $3.6 billion market.
When a user signs up with a company using BlockScore, the company asks for his or her name, address, date of birth, and either passport number or the last four digits of his or her social security number. That information is sent to BlockScore’s API and is checked against several public and private databases and watch lists. To combat identity theft, BlockScore then generates a list of questions that only the person owning that identity would know, such as “which make of car did you own in 1998?” or “which of these people do you know?”.
“With e-commerce and new financial services proliferating across the Internet, we see online fraud detection as an enormous and growing market,” said Roger Lee, a Battery general partner. “And major, recent online-security breaches, such as the Target breach, just highlight the need for more-robust online security in general.”
BlockScore’s CEO, Backus, met his co-founder and CTO, Meier, while the two were computer-science majors at Stanford. Later, the two met Morton at a Stanford Bitcoin Group meeting, an organization Backus and Meier founded. Morton was previously a founder and CEO of Cube, a Y-Combinator-backed software and payment-systems company. Several years ago Morton’s identity was stolen online, an incident that helped convince him to become involved with BlockScore.
BlockScore is the intelligent ID verification system for Know Your Customer/Anti-Money Laundering (AML/KYC) compliance and anti-fraud. BlockScore provides powerful identity verification and knowledge-based authentication (KBA) to many industries including marketplaces, financial instructions, Bitcoin, and sharing economies. BlockScore can be easily integrated into any business in a day using APIs and client libraries. Visit blockscore.com or follow on Twitter @getblockscore for more information and to instantly signup for an account.