Clear acquires ID verification startup Sora ID to go after fintechs
Clear (NYSE: YOU) has acquired Sora ID, an ID verification startup, in a bid to expand into the fintech space.
Why it matters: About half of all potential customers abandon the signup process during KYC verification, which is a huge drop-off for fintechs.
Context: Clear is best known for its biometric identity verification and expedited entry booths at airports, but it has expanded its B2B ambitions in recent years.
- "As we've moved outside the airport with partners like Avis and LinkedIn … we've [seen] demand in the KYC space," Clear chief product officer Derek Gottfrid says.
How it works: Sora ID's platform lets end users authenticate their identities once and reuse their verification across different financial institutions.
- Customers include ZeroHash, OpenSea, Karat, PeerStreet and Partial.ly.
- "They share a vision in terms of a reusable identity, so it felt like a natural match to combine their vision and our vision, their product and our product, to bring Clear Verified to the KYC space," Gottfrid says.
Between the lines: In its pitch to fintechs, Clear touts 17 million users and experience working in other highly regulated industries such as airline security and health care.
Yes, but: "This is not a straight B2B play. Our members are one of our greatest assets," Gottfrid says.
- "We bring not only an amazing experience for people that are new — but also for our millions of members that we've already verified, they're going to have a differentiated experience," he adds.
Of note: According to Pitchbook, Sora ID had raised $5.3 million in venture funding from investors that include Greylock Partners, General Catalyst and Abstract Ventures.
- Deal terms were not disclosed.