As mobile payment usage increases, companies that offer fraud prevention services and identity verification are an integral part of the payments ecosystem. Mastercard’s acquisition of Ekata for $850 million showcases the incredible value that identity verification with venture capital funding may be able to attract.
Ekata found its success in providing financial institutions with APIs that determine transaction risk via personal information such as your email address, phone number, and physical address, according to ZDNet. It calls this service the “Ekata Identity Engine.” It claims on its website that Lyft, Intuit, Patagonia, Affirm, and other prominent brands take advantage of its services.
This is Mastercard’s sixth acquisition that has run well north of $100 million, as publicly known via Crunchbase. And it’s not shy about flirting with paying large dollars for the companies it wants. Just last year, it spent $825 million on Finicity, a Utah-based startup that provided open banking and real-time financial data services.
Overall, Mastercard has made 22 known acquisitions as recorded by Crunchbase. That’s nearly double Visa’s 13 known acquisitions.
Notably, Ekata does not appear to have taken on any venture capital funding to get where it is today—somewhat of a rarity for a SaaS company based in Seattle, a somewhat significant startup hub with a good number of prominent investors trawling about.
And while this is certainly a big day for Ekata and Mastercard, the numerous number of startups in the identity verification space are likely finding their valuations justified and their odds of a successful exit rising. So far this year, identity verification and fraud detection startups have pulled in nearly $835 million in venture funding across 24 rounds—37.5% of which were made in seed-stage startups, as calculated from a Crunchbase data pull.
We’ve also identified a heat up in the identity verification space. Just last week, our own Rebecca Ayers did a round-up of identity verification investments totalling $319 million across only three companies. On a more humble note, we wrote about Sardine, which raised $4.6 million to prevent fintech fraud with its AI technology.