When we think about identity in the digital world, it’s usually a username and password, but Merit (originally called Sigma) aims to help governments issue digital credentials linked to a government license database with the aim of putting an end to flimsy paper cards.
Today the company announced a whopping $ 50 million Series B. Rose Park Advisors led the round that included previous investors a16z, Bow Capital and Govtech Fund, as well as new investors Experian Ventures, Spike Ventures, InState Capital, Collier Fund, Metaplanet Holdings and other individual investors. Merit has now raised $ 80 million, according to the company.
The company’s co-founder and CEO Tomer Kagan said the idea is to create a verifiable online digital identity. A driver’s license is proof that the state gives you a license to drive, but one that is issued in the form of a plastic card. Merit wants to change this by moving these credentials to the digital realm and linking them to a government database.
“You must be authorized to disclose information about yourself to third parties that is programmatically verifiable, which means that it is only known to be true because I am relaying something that has been given to me by an organization that you can attest to it comes from this organization. So over the past five years we’ve built a platform that actually does this by allowing companies to connect to other databases, ”said Kagan.
The company has worked with various governments over the past five years to create connectors to these license databases so that third parties can access the data and update it automatically. So, if you’re a plumbing company, you can view your employees’ plumbing credentials on the company website and have them automatically update when your license is renewed (or show that it wasn’t).
One of the most prominent examples of this was a Merit project that followed the tragic last summer Collapse of a building in Miami. In just a month, the company built a system to verify which salespeople and employees were allowed on the site, a project that verified the identities of more than 16,000 people, the company said.
For now, at least, the company has to work directly with every government agency it contracts with. Each project requires its own workflow and connectors, but Kagan said that each project builds on the next, so it’s not like starting from scratch with each new client.
Today the company has around 70 employees, and by the end of the year there should be around 100. Kagan adds that he has put a lot of thought into how to build a diverse and inclusive company.
“Our non-engineering teams look quite different today. But of course we try, like everywhere else, to increase the proportion of women in mechanical engineering, for example. What really helped is that we are completely remote. Getting out of the Bay Area was actually very helpful in terms of hiring a diversity workforce, ”he said.
Kagan said fundraising was a pretty stressful exercise during the pandemic, and he had to convince some investors that his company’s business model of selling services to the government was a viable strategy. Some investors wouldn’t invest in companies that mostly deal with government contracts, but it ended up raking in $ 50 million so there were plenty of investors willing to go that route.
