Mobile identify authentication startup Payfone has raised $23.5m in a Series E round of funding.
BlueCross BlueShield Venture Partners and individual investor and Andrew Prozes led the round with new investors Strauss Zelnick, Maclab Development Group and Transaction Network Services also participating.
Investment also came from existing backers RRE Ventures, Opus Capital, Relay Ventures, Early Warning Services, American Express Ventures, Verizon Ventures and Rogers Venture Partners.
New York-based Payfone attempts to remove the friction in online authentication by verifying user’s SIM cards to avoid security questions and speed up new customer on boarding.
Payfone CEO Rodger Desai said, “Years ago, we made a contrarian bet that the way in which mobile phones instantly authenticated themselves would solve fundamental issues with validating digital transactions.
“The web and mobile channels continue to suffer through the historical struggle with the trade-off between security and convenience.
“Now the days of protecting sensitive data and securing high-value transactions with text messages, one-time passcodes, and knowledge-based questions, are numbered.”
Launched 2009, the company focuses primarily on the banking sector and claims to verify 10 million transactions a day.
With BlueCross BlueShield backing the company Payfone will expand into the insurance space where it expects to grow to 50 million transactions a day in 2017.
The insurance firm’s venture arm’s managing director Mike Spadafore said: “Payfone’s product set affords healthcare organizations the ability to shift valuable time and money spent verifying identity to driving engagement and better healthcare outcomes.
“Regulated industries such as banking, healthcare and insurance have a lot in common in this regard. Customers in each industry are shifting their activities to digital channels: from sales to customer services, to payments.”
Spadafore will join the company’s board as a result of the deal.
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