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Identity and access management startup Transmit Security has raised $543 million in what must be among the largest series A rounds of funding ever, giving the Israeli company a valuation of $2.3 billion.

The raise comes amid a hotbed of activity across the digital identity verification and management space, with Okta recently completing its $6.5 billion Auth0 acquisition and Mastercard shelling out $850 million for Ekata. Data suggests businesses will spend around $9.4 billion on digital identity verification technology alone in 2021, a figure that’s set to grow to $16.7 billion within five years.

Kill the password

Transmit Security is setting out to solve the “password problem,” as around 80% of data breaches are reportedly due to compromised passwords, burdening the global economy with $2.9 million in cybercrime costs every minute. To help combat this, Transmit Security recently launched BindID, which is pitched as an “app-less mobile authenticator” website or app creators can integrate to authenticate consumers through their on-device biometrics — such as face or fingerprint scanning — enabled by a simple QR code.

Transmit Security: BindID uses QR code to authenticate any user with biometrics

Above: Transmit Security: BindID uses QR code to authenticate any user with biometrics

Elsewhere, Transmit Security also offers passwordless authentication for workforces, called WorkID, and an identity policy orchestration toolset called FlexID.

In an increasingly distributed workforce, technology such as that offered by Transmit Security enables companies to onboard new workers more securely and authenticate future logins regardless of where the employee resides. And banks can verify customers as the industry continues to move away from in-person interactions, helping counter the ongoing threat posed by identity theft and fraud.

Frictionless

There is more to the passwordless movement than simply making things more secure. Customers might abandon their shopping cart at the checkout if they can’t readily recall their password, while IT teams can waste a lot of resources helping a workforce of thousands access their online accounts when they get locked out. The ultimate goal is to remove friction across the board.

“Every time I see a login button on a website, I get anxious,” Transmit Security president and cofounder Rakesh Loonkar said in a press release. “Whenever an app texts me a code that I have to enter, I become frustrated with the process. We’ve all learned to suffer and accept the terrible user experience and poor security that comes with passwords just because that’s the way it has always worked in the past.”

Founded in 2015, Transmit Security had been entirely bootstrapped before now — the founders sold their previous security company to IBM for a reported $1 billion in 2013. Transmit Security — which now has offices in Tel Aviv and Boston — has also amassed a fairly impressive roster of customers, including HSBC, UBS, Santander, and Lowe’s.

The company’s gargantuan cash injection was co-led by Insight Partners and General Atlantic, with participation from Cyberstarts, Geodesic, SYN Ventures, Vintage, and Artisanal Ventures.

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