Earlier this month, at the Web Summit 2020, the European Investment Bank Group (EIB Group) launched a new financing instrument of €150M, to support AI startups across Europe.
The investment instrument was launched to support the development of Europe’s digital future in areas such as high-performance computing, quantum technologies, and cybersecurity, among others.
In a recent development, the European Investment Bank (EIB) has announced an investment of €15M as growth funding to IDnow, a German startup that provides machine-learning technology for its Identity Verification-as-a-Service (IVaaS) platform.
Use of the funds
The raised capital will primarily support IDnow’s research and development (R&D) activities as well as its international expansion.
Paolo Gentiloni, European Commissioner for the Economy, says, “As ever more of our interactions move online, it’s more important than ever that we strengthen data security and fraud prevention. This support for the German platform IDnow will enable it to expand its services for digital identity verification of customers and business partners alike. We are investing in a safer online business environment, an objective of our digital finance strategy.”
What service does IDnow provide?
With its Identity Verification-as-a-Service platform, IDnow aims to make the connected world a safer place. IDnow claims to provide secure, remote auto & video identification, and electronic signature services. This enables companies to acquire customers and manage transactions faster and easier while complying with Know Your Customer (KYC) and anti-money laundering (AML) regulations.
The company was founded in 2014 by Armin Bauer, Dennis von Ferenczy, Felix Haas, and Sebastian Baerhold.
IDnow uses artificial intelligence (AI) to check all security features on ID documents and can, therefore, reliably identify forged documents. The company claims to verify the real-time identities of more than 7 billion customers from 193 different countries.
Additionally, IDnow covers a range of use cases, both in regulated sectors in Europe and for new digital business models globally. The platform allows the identity flow to be adapted to different regional, legal, and business requirements on a per-use case basis.
IDnow’s customers include leading international companies from various industries such as Bank of Scotland, BNP Paribas, Commerzbank, eventim, Sixt, solarisbank, Telefonica Deutschland, UBS, and Western Union. Besides, fintechs such as Fidor, N26, smava, and wefox are also its customers, among others.
The startup is backed by VCs including Corsair Capital, BayBG, Seventure Partners, and G+D Ventures, as well as a group of renowned business angels.
An initiative to boost investment and to create jobs & growth
The funding is part of the European Growth Finance Facility (EGFF), a product under the guarantee scheme of the European Fund for Strategic Investments (EFSI).
Under the programme, the EGFF addresses quasi-equity gaps linked to structural market failures across the EU in the provision of adequate risk capital to late-stage, venture-backed companies.
EFSI claims to be the central pillar of the Investment Plan for Europe under which the EIB and the European Commission are working together as strategic partners, and the EIB’s financing operations are boosting the competitiveness of the European economy.
As per the initiative, European small and medium-sized enterprises (SMEs) and mid-caps often suffer from systemic shortages of large, non-dilutive financing options for growth investments, both tangible and intangible. The benefit of EFSI in this specific case is the clear enhancement of the risk capacity of the Bank.
The Investment Plan for Europe
The Investment Plan for Europe is an EU initiative to boost investment and to create jobs and growth. Through guarantees from the European Fund for Strategic Investments (EFSI), the EIB and the EIF are able to take on a higher share of project risk, encouraging private finance providers to participate in the projects.
The projects and agreements approved for financing under the EFSI so far are expected to mobilise €535.4B in investments and support more than 1.4 million startups and SMEs across all EU Member States.
EIB Vice-President Ambroise Fayolle, who is responsible for EFSI and the bank´s operations in
Germany, says, “IDnow, a first-time borrower for the Bank, depends on significant R&D and marketing investments related to commercialisation. The transaction is an excellent example of how the EU bank, with the support of the Investment Plan for Europe, can facilitate the development of innovation, in particular in sensitive policy areas such as anti-money laundering, counter-terrorist financing, and cybersecurity, which are of utmost importance for the European Union and its economy.”