Potential Equifax rival Truework raises $12m

31 Jul 2019

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US start-up Truework has raised $12m in funding to expand its identity verification platform.

Yesterday (30 July), San Francisco-based start-up Truework announced that it has secured $12m in a Series A funding round, which was led by Sequoia Capital, with participation from Stanford University.

Previous investors, including Khosla Ventures, Menlo Ventures and Founder Collective, also returned in this round. This brings the total raised by Truework to $15m.

The start-up, which now has more than 1m users, said that the funding will be used to scale its product and engineering teams, while expanding the company’s scope.

Truework has developed an identity verification platform that secures sensitive identity information by providing details only when consumers give their explicit consent. This enables the company to build a network for verified identity that aims to put consumers in control of their sensitive personal information.

The company’s platform responds to income and identity verification requests from employers, lenders, landlords and background-check companies, drawing on a mix of public and private databases. Applicants whose details are being vetted will then receive an email where they can approve the data that is being requested.

On the company’s blog, Truework said: “We’ve all been disillusioned by at least one of the many companies in recent history that have failed to treat user privacy as a priority.

“But the health of our data economy depends on much more than protecting passwords … The sharing of personal data, such as employment, income, asset and credit history, serves as a one-way mirror with consumers stuck in the hot seat.”

The start-up’s co-founder and CEO, Ryan Sandler, previously led product development for LinkedIn Salary, a feature that impacts millions of HR professionals and jobseekers.

Equifax competitor

When it comes to financial verification, Truework claims to offer a more transparent alternative to the likes of Equifax, which was slammed with massive fines following a monumental data breach in 2017 that affected 148m Americans.

In an interview with Forbes, Sandler said: “Equifax makes almost $1bn in revenue a year by selling income and employment data to verifiers at banks and often without consumer permission.

“Moving to a model that makes it faster and more secure to verify private information has seen incredibly large adoption in the one year since we’ve launched.”

Keith Rabois, a partner from Khosla Ventures who led Truework’s seed funding, added: “There’s a pre-existing need for millions of Americans to validate their income and verify other pieces of their identity.

“The question is how to best do that in a way that serves the interest of everybody involved, including the consumer. Arguably, the incumbents don’t protect the consumer and don’t care about the consumer at all, and haven’t served paying customers very well either.”

Sequoia Capital partner Alfred Lin, who plans to join Truework’s board of directors, said: “Identity is vital to the health of the sharing economy and other online services, but it is completely broken today.

“Truework is building the internet’s new identity layer that will bring security and speed to many different transactions. The success they have had in just over a year shows the incredible demand for innovation and privacy in this very outdated space.”

Kelly Earley was a journalist with Silicon Republic