Our investment thesis in IRONCHIP
We are excited to share with you our latest investment in cybersecurity! After building know-how on the sector thanks to our previous investments, we knew Ironchip was a company developing a disruptive approach in authentication, and we wanted to be part of their exciting journey.
When you see cybercrime costs are estimated to be $6 trillion by 2021, you start thinking of different ways to secure your most valuable assets. This is one of the many reasons why two-factor authentication (2FA) was created, as it adds an extra layer of security to traditional passwords. By combining what users know (passwords) with what users have (phones able to receive verification codes via SMS), companies thought they found relief to one of their most pressing problems.
Nevertheless, traditional 2FA has proven it has shortcomings in meeting the highly secure standard companies require nowadays as it remains vulnerable. By using well-known techniques, such as phishing or password reset, a hacker could bypass traditional 2FA and gain access to valuable information. The next logical step was to integrate a third factor into authentication, which is what users are (biometrics). This is an exciting field in cybersecurity in which we have important know-how thanks to our beloved portfolio company: Buguroo.
Thanks to the know-how derived from this investment, we realized that we were facing something big when we met Ironchip’s outstanding team. By leveraging proprietary deep neural networks, Ironchip offers a technology that enables to create a secure authentication zone, based on the radio magnetic waves emitted by devices. This technique, known as geofencing, allows for a radically different and innovative approach: combining location-based services with authentication, which ultimately translates into an additional safety measure for the device.
This was extremely exciting for us because we understood that this technology not only helped to solve the pressing issues of authentication in financial institutions — who are in the midst of finding complementary authentication solutions due to PSD2 regulation — but also had multiple use cases and applications in different industries, such as critical infrastructure and manufacturing.
We would like to finish our article by explaining how this investment opportunity matched our investment thesis:
- Deep tech differentiated product At Inveready, we love innovative approaches based on deep tech where their clients detect value from the very first moment. This is the case for Ironchip as big banks and companies from different industries expressed their desire to get their hands on the product.
- Pressing pain: Real pressing pain in the financial industry, critical infrastructure, and manufacturing industry with relevant and multiple use cases; all of which implies billions of total addressable market.
- Industry know-how: The know-how acquired from previous investments in this segment helped us to understand, from the beginning, that this was a disruptive approach with untapped potential. Also, we had been actively seeking to increase our presence in the cybersecurity sector to leverage associated synergies with our portfolio companies.
- Team: the entrepreneurs proved to be extremely resourceful as they have been able to shoestring very effectively and have managed to reach out to large enterprises to showcase their technology.
All in all, Ironchip is led by an extremely resourceful team and follows a disruptive deep tech approach to a pressing problem for huge industries, including one that matched with our expertise and offered clear synergies with our portfolio companies. Therefore, this was an opportunity that we could not afford to miss. Stay tuned for more updates in our portfolio!
