Interview With Itay Levy and Shmuli Goldberg
Describe your product or service:
“Identiq’s network enables companies to validate users’ information without sharing any sensitive customer data whatsoever. Companies leverage one another’s data — without ever sharing it. It’s totally anonymous, enabling true collaboration and real results.
Fraud fighters know collaboration is a powerful weapon. Collaboration means catching attack trends and compromised data early on while providing a seamless experience for known good users.
But typically, companies are forced to work alone. Criminals know it — and use it. They attack multiple sites simultaneously, often focusing on specific industries, taking full advantage of the fact that their targets work in silos. Good customers end up proving themselves over and over.
Companies need to know which users and details are legitimate, compromised, or fraudulent — so they need access to information beyond their own data. Until now, direct collaboration has been extremely limited due to privacy concerns and the need to protect competitive information or trade secrets.
Instead, companies worked together indirectly via middlemen — data brokers or data enrichment services — who aggregate (and resell) data and the knowledge it provides.
There are some clear limitations to the third-party data broker setup, including:
- Poor Data Freshness and Reliability — because data providers aren’t incentivised to keep their datasets clean and up to date.
- Looking for the Bad Instead of the Good — which makes sense, as queries are expensive, but results in business lost to false positives, delays, and frustration — an amount that often adds up to more than is lost to fraud in the first place.
- Privacy and Data Exposed to a Third Party — with personal user data being shared and then stored and later resold by third parties. Plus the risk of data breaches.
Identiq cuts out the middleman. Companies collaborate directly — and anonymously — to validate identities. The data is fresh, good customers are identified easily and get a great experience, and no personal user data is ever exposed in any way.
Describe your company values and mission:
“Our mission is to herald an entirely new kind of fraud prevention and identity validation, one that is far more accurate and better for both companies and consumers and create a new and much-improved standard for data privacy.
We’re passionate about what we do. Privacy is too important to be an afterthought, but convenience online is crucial to today's world. We're proud to be the solution — and we love working together to go the extra mile and make it happen.
We believe that together we can create a safer & more private internet.”
How are you funded? I.e. type of funding, number of funding rounds, total funding amount.
“Identiq raised a $47 million Series A round in March 2021, and before that, a seed round of $5 million in May 2019.
Insight Partners led the Series A together with Entrée Capital who led both this and our seed round. Sony Innovation Fund by IGV and Amdocs were part of the Series A round, as were existing investors, Oryzn Capital, Vertex Ventures Israel, and Slow Ventures.”
How big is your team? Tell us a little about them (I.e. co-founders, freelancers, etc.)
“We have three co-founders, who each bring their own area of expertise to the company. Our CEO, Itay Levy, is a serial entrepreneur — Identiq is the third startup he’s co-founded. His experience in founding, growing, and selling two successful startups, as well as his technical experience and degree in computer science, makes him ideally positioned to build and manage the world’s biggest anonymous identity validation network.
Our VP of Product, Uri Arad, was the Head of Analytics and Research at PayPal's risk department before he left to co-found Identiq. Uri’s professional background in fighting fraud, combined with his deep experience in product development, makes him an ideal fit for the role of VP Product. He’s now creating (and selling) the product that he had been wishing for for ten years at PayPal.
Ido, our VP of R&D, has been creating awesome engineering teams from the ground up for nearly twenty years. He loves to bring passionate, creative developers together to find groundbreaking solutions to big challenges — which is vital for Identiq, since we’re doing something that has never been done before.
How did you come up with and validate your startup idea? Tell us the story!
“Identiq was born out of the desire to combine what seemed like two mutually exclusive priorities. On the one hand, companies want to fight fraud through collaboration, knowing that working together makes them stronger and better able to combat the highly collaborative online criminal underworld. On the other hand, the need to protect the privacy of users’ data means that many kinds of collaboration are blocked as they would require the sharing of user data. Identiq was founded to change that. With Identiq, companies can use F.A.I.R. technology to compare data and validate users and account details without sharing any data at all.
Itay Levy, our CEO, was looking for an idea for his third startup. As part of his research, he discovered a huge amount of personal customer data, which is easily, cheaply, and legally available for purchase from third-party data brokers. He was absolutely horrified and decided he wanted nothing to do with it. Instead, he started looking for a privacy-first solution — and discovered Privacy Enhancing Technology. That’s when he met Uri Arad, now our VP of Product.
Uri had been searching for a solution to the challenge of verifying new users for years. By definition, it’s a very challenging problem because your site doesn’t yet know anything about the user. They haven’t seen them before. But Uri knew that third-party data brokers weren’t a great solution — their information was unreliable and often stale. When Itay and Uri met, they realized that they had two parts of a puzzle. Put together, Privacy Enhancing Technology became both the solution to the data privacy problem and to the question of how to validate new users reliably.
They tested the solution to make sure they were really on to something — both the cryptography and the technical aspects — and when they were satisfied that everything did work, they did market research, talking to exactly the kinds of people who would use the product. The responses were overwhelmingly positive — so many experienced professionals saying that this was the solution they’d been looking for, for years.”
How did you come up with your startup's name? Did you have other names you considered?
“The first name our founders came up with was ‘Alliance Zero’ — because Identiq had always been conceived of as an alliance, a network of companies collaborating against fraud and because right from the start having zero trust was a part of that solution, for the privacy element.
But Identiq was more catchy! It makes people think of identity right away, of course, and it has both the ‘IQ’ element, which nods to the fact that it’s a pretty cool and clever solution, and ‘tick’ (because it’s pronounced ‘I-den-tick’) which refers to the fact that our network validates identities positively — as in, it gives them a tick to say that they’re good users.”
Did you always want to start your own business? What made you want to become an entrepreneur?
“Our CEO is a serial entrepreneur; he’s always wanted to start his own businesses and has done so very successfully! Uri and Ido, our other co-founders, were enthused by this specific solution. Uri had been looking for the solution to the new user problem for years and was excited to make it happen. Additionally, he’d wanted to do something about the issue of data proliferation, which in turn fuels online fraud. Co-founding Identiq means that he’s part of the solution. Ido Shilon loves creating R&D teams and is always interested in finding creative solutions to entirely new challenges. He was intrigued by the challenges of Identiq’s decentralized network, employing Multi-Party Computation — the first time this cryptographic technique has ever been put to work solving the identity validation problem.”
Did you encounter any roadblocks when launching your startup? If so, what were they and what did you do to solve them?
“The greatest roadblock has been that it sounds too good to be true. Fortunately, educating the market about the technology and how it works — which is much more intuitive than it sounds at first — has helped us make great progress there.”
Who is your target market? How did you establish the right market for your startup?
“Our target market is any company that needs to positively validate that their users are real, are who they say they are, and already are known and trusted across the internet.
We have a truly wide variety of industries and markets represented on the network. These include some of the largest companies in the ridesharing, dating, gaming, ecommerce, ticketing, events, digital goods, physical goods, travel, communication, banking and financial services industries, and more.
This diversity is one of our strong points as a network, as a good real user will have accounts and history with many companies across many industries. Our members can leverage this overlap to validate known, trusted customers and give them the best possible experience.”
What's your marketing strategy?
“Honestly, a lot of our marketing is word of mouth — companies on the network are excited about collaborating together against the fraudsters and want to bring more of their peers into the group.
As well as that, of course, we attend industry events and create gatherings and content designed to share expertise and experiences within the fraud prevention world, through bylines, blog posts, presentations, roundtable discussions, panels, and much more.”
How did you acquire your first 100 customers?
“Many came from the initial market research. We’ve seen a pattern that when people hear about the concept behind the network and understand how it works, they’re hooked almost instantly — they love the collaborative mission, they get how impactful it can be and how powerful a solution it is to the problem. They want to be a part of it.”
What are the key customer metrics / unit economics / KPIs you pay attention to to monitor the health of your business?
“The crucial one is the identity validation capability of the network — what are the chances that the network can confidently validate a good user’s identity? We have extremely high coverage in the US already, strong coverage in North America, the UK, and Europe, and [we] are fast developing powerful coverage elsewhere as well.”
What's your favorite startup book and podcast?
“Book: Phil Jackson wrote a book called ‘Eleven Rings: The Soul of Success.’ He explains that the way to build a team is to have a clear goal with everyone working to achieve it. That’s what I aimed for when I started Identiq — to build the right team for the right goal. And that means the goal needs to be a really strong one, a powerful one — one that people will be motivated to achieve. On the other hand, you need the right people — so they can work together for that goal, working past ego or personal priorities to make everything better for everyone.
I can’t pick just one podcast! I read and listen to podcasts constantly — Audible has changed my life. I discover something new and insightful every two or three weeks and try to make it part of my life and how I think.
There’s one podcast experience that has, in a way, resulted in what I’m doing today — in Identiq.
One of the first podcasts I listened to from Israel is called ‘HaShavua’ — This Week. It’s about what’s new in tech. One week, a guest talked about credit cards and how if you buy online, the merchant isn’t covered. It was Michael Reitblat, from Forter. He spoke so compellingly, and the way he described the problem — I was hooked. It was such a complex problem.
Then, when I learned about blockchain and cryptography, I realized that trust and mathematics could be the answer to solving this fraud problem in a new way that no one had thought about before.
Because of that podcast, I looked at credit card fraud. I realized that though the problem was complex, the solution could be simple. And … so, after a long journey, during which I found a better solution than blockchain … Identiq happened.” – Itay Levy, CEO
What is something that surprised you about entrepreneurship?
“One of the investors I’ve worked with for many years now — Yaniv Jacobi from Oryzn Capital — has really taught me to distrust the easy way. What matters is doing things the right way. For example, a shortcut might look really tempting — to signing a customer, to funding, anything — but every time I’ve taken one, I’ve ended up regretting it. Yaniv helped me see that it's a strong pattern, not a coincidence. I’ve learned that lesson. At Identiq, no shortcuts. We do it right.” – Itay Levy, CEO
How do you achieve work/life balance as a founder?
“Take personal balance in your life very seriously. I personally find this through sports. I like running and have completed a couple of marathons. I also swim and practice yoga religiously. I would recommend everyone to prioritize what they need to achieve the inner balance that makes them happier and more effective in every avenue of their life.” – Itay Levy, CEO
What is a strategy you use to stay productive and focused?
“When my father grew up, he was one of the poorest kids in Tel Aviv. From ages 13–17, he worked to support his family. He managed to get to school later and finished his degree in 2 years. Following a BA in Israel, he then flew to the US with $100 in his pocket to complete his MA at UCLA. He made that work, and after spending a few years in research firms in the US, he came back to Israel to start the market research segment in Israel. He’s living proof that when you know something is the right thing, you can make it happen.
He’s tremendously inspirational and has given me so much practical help and advice, but the reason his impact is so great is that he’s also empowering — he’s given me the strength to keep going. When things are hard, and I need to reach a bit further to succeed, he’s the one I look to.
I know what we're doing at Identiq is something that the world really needs right now. I have a fantastic team to work with — and together, we'll make it happen. Knowing your goal and being very clear about why it's so important, for you and the world, is very powerful motivation.” – Itay Levy, CEO
Did you have to develop any habits that helped lead you to success? If so, what are they?
“During my MBA at Kellogg School of Management, one of the professors, Aharon Ofer, had this equation. He said the younger you are, the more bets you need to take. The older you are, the safer you need to play it. I was lucky to be doing the MBA when I was still young — and so I took the leap of starting another company, this time as CEO. And after that was acquired, I started another one.” – Itay Levy, CEO
What was your first job and what did it teach you?
“My first real job was helping my brother, way back in 2001, at a company which started in our basement. We had a room with four PCs in it, and we were looking for a way to find, analyze, and report on trends online. We wanted to download pages; work out what people were saying.
Even back then, I turned to Google. But I didn’t realize that there was a right way to do that and a wrong way. I was very young. I didn’t know that too much, too fast, was a problem.
So, I created a network of machines, using ours in the office room, and those of my friends and family. I had them all downloading. (This was well before the cloud — I had to rig it up myself.) It was prone to bugs, so I made a trumpet sound go off whenever there was a problem, so I could fix it.
In the very early hours one morning, I was woken up — there were trumpets in the office! Lots of trumpets. Something was really wrong.
Google had blocked us. And the other machines in the office. I called my mom to ask her to check if it was the same on her computer. Her response was, ‘What’s Google?’ Good thing she didn’t rely on it back then because they’d blocked her too.
It turned out that because of what I’d been doing … Google had blocked Israel. All of Israel. The whole country. For an entire day.
Yes, they fixed it. But that was definitely a memorable experience — and I can finally appreciate how funny it was, now that I’m older! It was also an important life lesson.
Now, even more than then, we’re all working with a lot of companies. Businesses, payments infrastructure, vendors … Everything is interconnected. We’re all interconnected as people. So, be aware of how you’re impacting others.
It’s something I’m aware of every single day at Identiq. The assumptions we’ve all been making about how data needs to be shared, to give us the convenience we want — those are deeply flawed. They’ve led us to an untenable position. That interconnectivity has become a weakness. But it shouldn’t be! Collaboration should be our greatest strength.
At Identiq, we’re trying to show people a different way of doing things, where collaboration is powerful yet never requires sharing personal user data. We hope our impact will change things beyond the scope of our own company.” – Itay Levy, CEO
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