ID.me raises another nine figures, this time in debt financing

ID.me Inc. has raised another nine figures, this time in debt financing.

The McLean identity security company secured $100 million in debt financing from funds managed by Fortress Investment Group LLC, along with a $20 million revolving credit facility, it said Tuesday. The funding deal follows $100 million the company raised in March from a handful of investors, including Viking Global Investors, Counterpoint Global (Morgan Stanley) and CapitalG, a growth fund of Google parent Alphabet Inc. (NASDAQ: GOOGL).

That last raise valued ID.me at $1.5 billion, the company said. It plans to use this latest funding to develop its secure digital identity network and expand its offerings, including with a new Covid-19 vaccine verification option in its digital wallet.

ID.me has been growing rapidly for the past year, with 324% revenue growth during the past three years; it also said it has added 1,300 new employees since January. It is planning to open a new office in Tampa that will house up to 500 employees. The company also secured "two blanket purchase agreements with government agencies worth over $1 billion each," it said.

The McLean startup also took the occasion of its latest funding announcement to note a couple of new hires. Rajat Bahri joined ID.me as chief financial officer, coming off of five years as CFO at retail startup Wish. He also previously served as CFO of Jasper Wireless and Trimble Navigation. Kevin Lyons has joined ID.me as chief people officer, after serving in the same role at Brinks Home Security. And Alexei Czeskis, formerly an engineer in Google's authentication and security division, has joined ID.me as vice president of engineering.

ID.me, founded in 2010 as the military-focused TroopSwap, had raised $241.33 million to date with this latest raise, according to PitchBook.

Since the onset of the Covid-19 pandemic, ID.me said it has “experienced explosive growth,” as consumers have shifted many of their shopping, health care and banking needs online, requiring better ways to verify a person's identity across the internet. The company has brought on state clients including New York, Kentucky and Arizona to help root out fraudulent unemployment claims.

ID.me also offers services for individuals, whether it's to access government services or to show proof of qualification for things like military or student discounts, for instance. The company says more than 100,000 people per day are joining the ID.me network to secure their identities and gain access to services and benefits.

"One of our missions for the past year has been to help states get individuals the benefits they deserve while battling massive identity fraud," Blake Hall, founder and CEO of ID.me, said in a statement Wednesday. "Now, with this new financing, we can double down on our corporate vision to solve every digital citizen's biggest pain point — the multiple password problem."

The big number

$375 million — Amount approved Tuesday by the Maryland Board of Public Works to cover the early payoff of "private activity bonds" helping fund the Purple Line light rail project in Montgomery and Prince George's counties, according to Maryland Matters. Maryland Transportation Secretary Greg Slater told the board that paying off the bonds, which are expected to total $313 million, will allow the state to pick a new prime contractor for the project without the approval of bondholders. The previous contractor, Purple Line Transit Constructors, walked off the half-built job in 2020. The selection of a new contractor has also been delayed, according to the report. While Maryland transportation officials had hoped to sign with a new company by September, bids are now expected by the end of September and a new contract could come by February 2022.

Quotable

“I think the president’s mandate last week in terms of the vaccine is only going to strengthen the outlook as we go into the fourth quarter. We’re not discouraged yet.” — Gregory Hayes, CEO of Raytheon Technologies Corp., on Wednesday during the online Morgan Stanley Laguna Conference, according to the Hartford (Connecticut) Courant. Hayes said he believed President Joe Biden’s Covid-19 vaccine mandates would give air travel a needed boost, according to the report. Raytheon employs roughly 3,500 in Greater Washington, according to Washington Business Journal research.

Odds and ends