US identity verification start-up IDPartner Systems to shut down
IDPartner Systems, a US-based provider of online identity verification tools, is set to wind down after failing to secure the necessary funding to continue its operations.
IDPartner to close after three years in business
In a LinkedIn post announcing the news, company CEO Rod Boothby writes: “After almost three years of hard work, IDPartner Systems is shutting down.”
Founded in 2021, IDPartner provides a range of know your customer (KYC) solutions for businesses and banks to assist with document signing, background checks, and much more.
“We set out to build a Global Bank-Based Identity Network that would let people prove who they are in seconds with an ID verification from their bank,” says Boothby.
The San Francisco-headquartered company, which raised $3.1 million in seed funding in April 2023, aimed to build a network of a similar size as industry giants like Swift and Visa.
Commenting on the firm’s reason for closing, Boothby explains: “IDPartner was intended to be a two-sided marketplace. And like all two-sided marketplaces, we faced a cold-start problem.
“The rough plan was: 1) Get MVP supply of ID verification (we connected to 8K banks), 2) Get enough small and large company demand for MVP to impress banks, 3) Impress banks enough to get them to lower UX friction, 4) Use new low friction (one-click) to build usage traction, 5) Impress VCs with usage traction to raise Series A.
“We got stuck on number (2). We focused on selling the solution as an ID verification solution. Perhaps better marketing directly to developers, or pitching the product as a fraud reduction solution would have changed the outcome.
“In the end, we were not able to raise a Series A, and while everything is pointing in the right direction, we have run out of runway.”
On a personal note, Boothby says he is concentrating on concluding the “shut down process” while “simultaneously looking for my next opportunity”.
IDPartner joins a growing list of fintechs ceasing operations this year, following Received, a New York-based billing and accounts receivable platform, which announced its closure last week.
