Minnesota’s newest billion-dollar company bets big on ID verification tech

To position itself as the leader in a race toward faster and more secure methods of verifying a person’s identity, Shakopee-based Entrust has entered exclusive talks to acquire Onfido, a London-based company that uses artificial intelligence to ensure people aren’t manipulating their environment or facial biometrics to fool systems during the identification process.

Terms of the deal were not disclosed, but Reuters reported Onfido’s value to be around $650 million.

With Entrust already exceeding $900 million in annual revenue, the proposed acquisition is expected to put the company well over $1 billion in revenue in the coming year, company officials said, making Entrust the state’s newest billion-dollar company.

The strategy to grow in digital identity verification stems from surging demand among consumers for convenient ways to complete transactions, whether it’s making deposits into a banking account or renting a car, Entrust CEO Todd Wilkinson said.

And because people no longer want to walk inside a bank to open an account, not meeting demand essentially slows down how society interacts with providers.

“Which slows down commerce,” Wilkinson said. “It slows down the world.”

Prior to the pandemic, people were already growing accustomed to scanning their face, bank cards or driver’s licenses on their mobile phones to complete online transactions or open new accounts, Wilkinson said. But with financial institutions and government departments mostly closed during the COVID-19 outbreak, demand accelerated.

“We all got used to a fully digital workflow and interaction,” he said. “Everyone is working to try to make sure that we can continue to do that, but to do it with speed, do it with accuracy and fraud prevention.”

In 2022, businesses across the globe spent $11.6 billion on digital identity verification, according to Juniper Research. By 2027, it will double to roughly $21 billion.

“What’s fueling demand comes down to the ability to interact with the consumers digitally,” Wilkinson said.

Entrust began as DataCard Corp. in 1969. Following the acquisition of Entrust in 2013, it rebranded to Entrust DataCard and in 2020, company leaders rebranded again to simply Entrust.

It has a client base in 130 countries for its security technologies and services around authentication, digital signing and credentialing. The acquisition of Onfido — which helps entities avoid acceptance of a fraudulent identification during the signup process — expands the company’s footprint in the identity verification space, Wilkinson said.

Onfido currently generates more than $130 million annually and employs more than 500 employees. If the deal closes, Entrust, which has 900 employees in Minnesota, would employ over 3,400 people globally.

The company would have eventually surpassed a billion dollars in revenue regardless of the deal, Wilkinson said, “but this gets us there in one step.”