How does the internet know you’re really you? For years, the answer has been pretty clear: it doesn’t.
Identity has become more vital than ever as we become increasingly dependent on online transactions, from ordering groceries to paying rent. Unfortunately, most of us don’t have a foolproof way of verifying our identities aside from archaic security questions or some other easily accessible information, like an easy-to-guess password or the last four digits of a social security number.
Then there’s identity theft and fraud. In 2019 alone, 3.7 million people were victims of identity theft or fraud-related crime, according to the FTC. Identity theft claims alone rose 46% from 2018 to 2019. It’s estimated that these crimes cost Americans $1.9 billion in 2019.
And even when we do everything right, tech companies get hacked. Last month, credit card information from over 100 million users was leaked from payments processor Juspay, affecting customers of Amazon, among others. And in 2018, Venmo was found to leak private purchases by default, making some transactions visible on social media. Other companies who’ve been hacked in recent years include Equifax, Marriott, Square, and Dropbox.
Two former engineers of Square and Dropbox — Rick Song and Charles Yeh, respectively — saw an opportunity to solve this issue, and founded Persona in 2015. The company just announced a $17.5 million Series A led by Coatue and First Round Capital, and its angel investors include DoorDash founder Tony Xu and Plaid co-founders Zach Perret and William Hockey.
“Your fingerprint is not you. Your government ID or driver license is not you. I'd also go as far as to say that your face isn't you.” - Song
Although Persona isn’t the only startup making online identity infrastructure, its use of biometrics, AI, real time evaluation, and government document verification set it apart. Via an API, businesses can access this information to verify users. Aside from big-name investors, Persona already has some notable clients, including Brex, Postmates, Sonder, and Song’s former employer, Square. According to Song, it was his experience at Square that led to the idea for Persona.
“We found identity was critical for anything from account recovery to verifying for fraud, or building trust and safety for a delivery, to ensuring there's trust between two peers for transferring money,” Song said. “With that — an evolution of the requirements around identity and how to know who customers are — finding that wasn't really a one-size-fits-all flow.”
CEO Song first met CTO Yeh during a summer internship in the Bay Area back in 2012, and the two have remained friends ever since. In fact, Song and Yeh are roommates, running Persona from their apartment until workers return to the office. Song says it was Yeh who first wanted to found a startup.
“He'd been at Dropbox for about five years,” Song said. “He had a particular entrepreneurial aspiration. He was the one who really kicked it off, like, ‘Hey, let's go off and do this.’ I was the one who was like, ‘I really want to focus on the identity side of things.’”
“I think on the payment infrastructure side, there's so much in place that makes that overall secure,” Song added. “Whereas I think on the identity side, it's really not quite there. I think many of us, particularly myself, feel this looming sense of dread.”
“There will be a time when it's going to be near indistinguishable for a machine or human to tell if something's actually fake.” - Song
That sense of dread, tied to the potential threats of identity theft, fraud, and mass data breaches, was likely shared by other identity management startups. One of the leading companies in the space is OneLogin, which lets companies use its cloud-based platform for secure logins. Its customers include Facebook, Airbnb, and Uber. Other enterprise identity startups similar to OneLogin, like Okta and Duo, don’t provide the same level of security that Persona does, like video-based interactions, quizzes, or biometrics for a more complete user identification process.
As for data breaches, Song argues that companies that leak information simply don’t prioritize identity verification.
“Things like identity and storing and managing that data well, it won't necessarily generate more revenue or help you grow,” Song said. “And if you're especially in an early stage startup where you're seeking product market fit, there oftentimes isn't sufficient time to be able to do this well.”
As technology improves, the hurdles for identity verification get higher. The rise of deepfake technology has even made photo and video verification less airtight. And even the most sophisticated deepfake detectors can be fooled, according to a recent study by UC San Diego.
“Your fingerprint is not you. Your government ID or driver’s license is not you,” Song said. “I'd also go as far as to say that your face isn't you.”
One of the most recent developments in AI that excites Song also involves AI — and avocado armchairs. OpenAI has developed a model called DALL-E (a portmanteau of WALL-E and Salvador Dali) that can generate startlingly unique, realistic images based solely on a phrase, no matter how outlandish (like an armchair in the shape of an avocado). Song called DALL-E “wizardry,” saying that AI is advancing faster than he thought.
“There will be a time when it's going to be near indistinguishable for a machine or human to tell if something's actually fake,” Song said. “The way in which to combat it is not to take that post head on and say, ‘We’ve got to keep emphasizing biometrics as the sole way to know whether someone is who they say they are,’ but rather to take a multifaceted approach.”
As Persona competes with larger identity management startups, Song plans to continue the company’s horizontal approach to growth. Instead of focusing on a specific industry’s identity solutions, Persona has amassed customers in the fintech, hotel, and food delivery industries. As the company grows, Song finds that his experience running a startup is an “introspective journey.”
“What really motivates me these days is the people I get to work with, and the personalities, what drives them, helping them get a little bit closer towards what they're trying to do,” Song said.
