Solving the consumer identity challenge: Why we invested in ReachFive
In the B2C world, consumer identity remains the Wild West
Within the corporate environment the user identity challenge has largely been solved. Employees sign in once and gain access to company-wide services and data to perform everyday tasks. Enterprises can control employee access to company systems, monitor usage, and flexibly adapt to regulatory and other changes. The authentication experience is not always frictionless for the employee (think complex passwords and USB dongles), but users have to comply with company policy and the centralised system works. However, as soon as the walls of the enterprise are crossed and customers become involved, particularly in a B2C context, it is largely still the Wild West.
The challenges of digital identity affect both brands and their consumers. Brands, having built their multi-channel systems over time, possess hugely suboptimal, disconnected pools of consumer data dependant on the channel. At best the data is dispersed, at worst it is incomplete, inconsistent or non-existent. And even if merchants can somehow pull together the correct data to create a single view of the customer, with the new privacy regime in Europe, many are unsure if they can even use their own customer data operationally. Consumers, for their part, suffer the frustration of not being recognised across the various devices, apps or services they use. They are also increasingly wary of sharing personal information and painfully aware of the threat of identity cybercrime. Unlike in an enterprise context, their demands must be heard or else they will vote with their feet and go elsewhere.
Today, digital-first players like Amazon or Booking.com have invested heavily in proprietary identity solutions creating yet another competitive advantage over less tech-savvy merchants, who are worlds away from a single-sign-on experience. ReachFive has taken on this thorny issue all brands suffer and we believe has developed the most powerful offering in the market. It’s why we are proud to be investing in the company’s $10m Series A, alongside Caphorn Invest, Ventech and its existing investors.
ReachFive: getting personal while staying private
So what is ReachFive? Far more than just a registration and login tool, ReachFive is a full Customer Identity and Access Management platform (“CIAM”). ReachFive’s CIAM combines multiple forms of authentication, a unified repository of customer data, data compliance and enrichment, as well as analytics, to solve both brands’ and consumers’ pain points. Brands identify and understand their customers without compromising security or compliance. Consumers receive a much-improved experience and retain control over their data. It’s win-win.
For brands, ReachFive levels the identity playing field and allows its merchant customers to become the most nimble players in the market. It begins with the authentication process. Consumers are identified as soon as they interact with a business, be it logging-in through an app, landing on the website or even walking into a store. The data collected during the interaction is stored centrally rather than sitting in silos across multiple legacy systems. The amount and type of data collected is tailored depending on the amount and type of interaction. For example, your address may not be relevant until you make a purchase requiring delivery, while a newsletter subscription is likely more suited to a returning customer. Each unique consumer ID is thus profiled progressively and updated continuously. To enrich each ID with social data, brands use the platform to seek and manage consumer consent over time. With ReachFive being the single source of truth, and due to its high interoperability, the data collected can be fed into any other system — analytics software, CRM, marketing automation or even customer service, in a continuous and consistent fashion. Importantly, a high level of security is maintained throughout all processes, be it at data collection, storage or distribution points.
At the same time, consumers get a frictionless, personalised and secure experience. For the end user, authentication processes can be painful. This is particularly the case as we grow accustomed to speedier ways of logging-in, as well as experience a bigger generational shift towards instant gratification. Constantly having to refer back to long customer ID numbers, usernames, email addresses and myriad passwords is at best annoying and at worst enough to make you not bother logging-in at all. With ReachFive, customers have many a choice of identification technologies, from social connectors and One-Time-Passwords to OAuth-as-a-Service (API technology enabling customers to use credentials across brands they shop from, allowing for multiple identities to be finally seen as a single consumer). Consumers also give their express consent to have their data captured. Importantly, the burden of updating social information collected is no longer with the user — if you go “Facebook free” your data is automatically removed, without you having to proactively disconnect your account. And should you wish to view and edit the data that a brand holds about you, you are empowered to do so.
Building such a platform is no easy feat. While it takes brands close to 900 developer days to build the social connectors alone, ReachFive’s full CIAM platform takes just a couple of weeks to launch. And it does so on any cloud of the merchant’s choosing, be it in Europe, US or in China — a critical factor if a brand sells globally. ReachFive is the out-of-the-box solution when it comes to consumer identity, handling complex matters with simplicity and ease.
Becoming the global provider of consumer identity
ReachFive has fast become an essential part of the operations of some of Europe’s leading brands, from L’Occitane to Lacoste, with over 40 customers signed up to date. Many of its global brand customers have been won away from large incumbent vendors and committed to multi-year partnerships. Having spent years in research and development phase to deliver its modern CIAM platform, the business now manages over 40 million customer connections across 55 countries. As a result, the company saw its recurring revenue more than triple over the course of last year.
This is a market that is large and growing. Industry analysts estimate the size of the opportunity at $14Bn today, calling it “a mainstream business requirement.” With an experienced management team, including some very accomplished women (#womenintech!), the company is making its first inroads outside of France, its home market. And we believe this is just the beginning. The next step is to become the leader of consumer identity globally.