Alibaba payments arm Ant Financial buys US biometric startup EyeVerify for $70m

Ant Financial, the payments affiliate of Alibaba Group Holding Ltd., acquired EyeVerify Inc., to expand services using the U.S. startup’s biometric authentication technology for securing consumers’ online data and transactions.

Ant is paying about $70 million for the Kansas City, Missouri-based company, according to a person familiar with the matter who asked not to be named because the details are private. EyeVerify, which uses pictures of the human eyeball to unlock mobile services, will become a wholly-owned unit of Ant Financial, according to a statement from the company.

As its first investment in the U.S., Ant plans to use the technology to upgrade its own security systems and could eventually apply it to a future U.S.-targeted product. Formally known as Zhejiang Ant Small & Micro Financial Services Group, the Chinese company began using EyeVerify’s EyePrint ID on its payment authentication platform earlier this year. With 450 million customers and services spanning online payments platform Alipay, peer-to-peer lending and wealth management funds, Ant plans to integrate EyeVerify’s technology into more of its products.

“Acquiring a leading company like EyeVerify is a natural step for us to further invest in this very important area while taking a lead in this area globally,” Jason Lu, vice president of fraud risk management at Ant Financial, said in an interview. “Full integration will allow us to move faster and agile in a way that we can apply the technology in China and globalization strategy in India, and places where Alipay will expand into the next few years.”

EyeVerify checks identities through eye-vein patterns and creates a digital key equal to a 50-character complex password. Users hold their smartphone about 12 inches from their face so a picture can be taken, opening up apps or websites on their device. The company touts the technology as more than 99.99 percent accurate, making passwords a thing of the past.

Founded in 2012, the startup has raised $13 million in funding from backers that include Wells Fargo & Co., Samsung Electronics Co., Sprint Corp., and Chinese security giant Qihoo 360 Technology Co. More than a dozen financial institutions use its technology.

Biometric features, such as fingerprints and voice recognition, are being used by more than 35 banks banks and technology companies to safeguard accounts. Samsung’s Note 7 smartphone can be unlocked with an iris-reading camera.

Ant Financial’s deal comes as Alibaba increases its profile in Silicon Valley with investments including Snapchat Inc., mobile search provider Quixey Inc., and ride-hailing service Lyft. So far the e-commerce giant’s forays in the U.S. are focused on helping western companies reach Chinese consumers through services like Alipay and Tmall, a site for businesses to sell brand name goods in China, rather than compete head-on with the likes of Amazon.com Inc. or Paypal.

Ant Financial’s immediate priority in the U.S. is to win acceptance from American merchants so that Chinese consumers can use Alipay wherever they travel. The company says Alipay is already accepted by more than 70,000 off-line retailers in more than 70 countries and regions. Earlier this year, Uber agreed to let customers pay for their rides using Alipay in more than 400 cities.

Lu says that eventually, Ant Financial wants to reach up to 2 billion customers around the world.

“The U.S. customer has a lot of ideas about how Apple Pay works,” Lu said. “I think what we are going to provide is a similar, very highly secure and highly convenient experience for the U.S. customer and for our customers globally.”

For now, Ant Financial is taking a very slow and deliberate approach to the U.S. market, where financial services and online payments are among the most advanced in the world.

Ant, whose name refers to the small vendors that sell goods and services through Alibaba, is considering an initial public offering in Hong Kong in the first half of next year, people familiar with the matter have said. The company was valued at $60 billion in its most recent funding round.

Also read:

Alibaba raises stake in Chinese microblogging site Weibo to 31.5% for $135m

Indonesia asks Alibaba’s Jack Ma to advise its e-commerce development

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.