Mobile authentication startup Incognia has just announced a $15.5 million Series A round led by Point72 Ventures to boost the company’s global expansion at a time when identity fraud losses are running into the billions.
Headquartered in Palo Alto, California, with teams in San Francisco, New York, and Brazil, Incognia was founded in Brazil in 2014 as part of In Loco, a geolocation-based marketing solutions company, and launched in March 2020 in the United States as a unit of the parent company. It didn’t take long however for the startup to take over as the leading company in the business. In 2021, the company announced its rebranding to Incognia and from then on focused on developing the portfolio of mobile authentication solutions.
Pivoting the business model proved to be the right decision. By August 2021, with less than a year of operations dedicated only to the new business, Incognia had 40 million active users per day, and 100 million monthly. “Incognia grew ten times faster than In Loco in its first year of existence,” Andre Ferraz, Incognia’s CEO and founder, told LABS in a recent interview.
The increase in scams and identity fraud has also helped – according to financial consultancy Javelin Strategy and Research, just in the United States, identity fraud losses reached $52 billion and affected 45 million people last year. Today, Incognia’s authentication solutions are used by more than 200 million users in over 20 countries.
“New social engineering scams and cell phone robberies are forcing financial institutions to innovate in their fraud prevention techniques, driving our growth,” Ferraz said.
To keep up with the growing demand, the startup has been investing in expanding the offering of app-focused digital security solutions from an in-house developed location technology that uses location signals and motion sensors to silently recognize trusted users based on their unique behavior patterns, and is a key enabler for zero-factor authentication. The company claims its technology is 17 times more accurate than FaceID, for example, with error rates of less than 1 in 17 million validations.
“Today’s authentication and fraud detection solutions aren’t working for the user, or for businesses, and the market is looking for more innovative technologies. Incognia is pushing the frontier of identity assurance and authentication to deliver increased security with minimal user friction,” Ferraz said.
Besides financial apps, Incognia also looks at other segments such as delivery, gaming, social apps, and e-commerce in global markets.
Adam Carson, partner at Point72 Ventures, said it was the innovation proposed by the startup‘s solutions that got the fund’s interest. “Identity assurance on mobile is of the utmost importance in protecting user accounts against increasing fraud. As mobile apps take over the world, reducing fraud and improving customer authentication experiences should be the top priority for all major fintech companies and any mobile-first businesses that deal with money, We believe Incognia is at the forefront of mobile identity and authentication.”
How Incognia works
Incognia’s mobile location technology is, according to Ferraz, integrated into the company’s customer applications through a mobile SDK, which collects anonymous data from the sensors of mobile devices. Incognia’s technology uses GPS data and Wi-Fi, cellular, and Bluetooth data, making it highly effective in detecting location spoofing. From the strength of location signals and mobile motion sensors, Incognia builds a location fingerprint for each user based on their respective location behavior, which is unique.
All this data is encrypted and does not collect information such as the person’s name or any other civil identity information.
For customers such as banks and finance companies, it is possible to identify a particular location as the one where the final consumer most frequently makes transactions. With this information, they can, for example, launch security mechanisms that restrict or ask, in case of some inconsistency, for new forms of verification to the final consumer.