NJ Fingerprint Biometrics Firm BIO-key Gets $900K Strategic Investment from InterDigital
BIO-key, the Wall, N.J.-based fingerprint biometric identification solution provider, received a $900,000 strategic investment from Wilmington, Del.-based InterDigital Communications on Feb. 26, 2013.
The deal also involves significant research collaboration with InterDigital to target advanced cloud security and identity and access management solutions for the mobile market.
The research will focus on creating new, innovative technologies that can be used by consumers to authenticate in the cloud, said Mike DePasquale, CEO, in an interview.
“Everything in the context of technology intellectual property is moving to the cloud, and we have to find better ways to find that who is behind the device is really who they say they are when they are accessing information or making a transaction,” he noted.
In addition, said DePasquale, “we are seeing more and more handset manufacturers adding NFC [Near Field Communication] capability to communicate and replace credit cards. How are we going to ensure that the holder of that particular device is who they say they are when they are consummating the transaction?” Fingerprint biometrics, he asserted, is the most convenient and easy-to-use technology and the most secure in the context of positive identification.
The research collaboration provides BIO-key entry into the consumer mobility market, which “we could never really get on our own,” DePasquale noted. “They have reach, depth, breadth, connections, relationships; they have credibility in a space where we have solutions available, but we don’t have marketing and sales capabilities. … For our company, this gives us almost another channel to bring our technology to the consumer.”
Biometrics solutions are hot right now, as companies try to be first and best to market, offering solutions involving user-friendly authentication, endpoint security and other advanced mobile security measures.
NJTechWeekly.com came across two recent N.J. startup launches that rely on biometric factors: Allweb Technologies (Newark), which launched AllWebID in November 2012, and Watchful Software (Medford, N.J.), Charles Foley’s new enterprise solution startup, which we will cover in an upcoming article.
InterDigital will invest $900,000 in return for newly issued shares in BIO-key and a senior secured note that will mature on Dec. 31, 2015. BIO-key has raised an additional $500,000 in equity from a number of strategic private and institutional investors, DePasquale said.
The total combination of debt, equity and R&D funding of $1.425 million will be used to repay existing debt, fund growth initiatives and provide working capital. BIO-key said The Hickory Group has acted as its financial adviser for the deal.
DePasquale said this investment puts his company in a credible position with a big partner who has a significant presence in the mobility space. He added that BIO-key was introduced to InterDigital last fall, and after joint discussions it became obvious that there were points of synergy. The relationship evolved, he noted, and it seemed like a good fit.
Explained DePasquale, Interdigital has “a very big presence in R&D and licensing of technology to the mobile handset providers, the network infrastructure providers and the other hardware companies that provide communications components. With our fingerprint biometrics, we have advanced authentication, multifactor authentication capability.”
InterDigital, said DePasquale, wants to be able to use the research collaboration’s results. “We are emphasizing what we can do together to develop new products that can be licensed and sold throughout the ecosystem.”
In a statement, InterDigital’s Scott McQuilkin, senior executive VP, said the company is committed to “driving disruptive innovation across the mobile ecosystem through in-house development, partnerships, collaborations and acquisitions. Our collaboration with BIO-key is consistent with InterDigital’s newly formed Innovation Partners group, which is focused on expanding the company’s reach within the mobile ecosystem.”
The partnership and investment will not affect BIO-key’s status as a New Jersey-headquartered business, said DePasquale. “Our company is here and will remain here, and that’s our intent. We expect to expand here in N.J. as well,” he noted.