Biometrics is big and getting bigger thanks to a troika of Bay Area diehards.
Biometric technologies (and the supporting software and integrators) raked in an estimated $2.1 billion last year. That's up $800 million from 1999 and on track to hit $7.4 billion by 2012, according to the International Biometric Group.
Retinal, fingerprint and facial identification technologies (and the supporting software and integrators) raked in an estimated $2.1 billion last year. That's up $800 million from 1999 and on track to hit $7.4 billion by 2012, according to the International Biometric Group.
"Before it was primarily a matter of survival. Now it is not," said DigitalPersona CEO Fabio Righi.
Founded in 1996, the Redwood City company scored some initial interest from market movers Visa and Microsoft, but that only turned to cash in recent years. The 75-person company, which makes both fingerprint reading hardware and the software that supports it, secured customer Banco Azteca in Mexico last March. Eight million bank members registered initially, a group that has grown to 14 million. Although Righi declined to disclose revenue, he confirmed his company has been profitable since 2004, a major, and often postponed milestone.
Emeryville-based Upek, which sometimes competes with DigitalPersona, is also prospering. Having spun off from STMicroelectronics in 2004, the company logged its first full year of revenue in 2005 at $30 million. Last year it rang in $52 million and 2007 also looks strong. An IPO could be in the offing.
"Today, the biggest driver of our revenue is the notebook market," said CEO Alan Kramer, saying notebook customers IBM, Dell, Toshiba and Sony represent roughly 80 percent of the company's revenue.
Since Upek sensors debuted on IBM's Lenovo notebooks in 2005 -- the first widespread launch of biometrics to average consumers -- the company has fortified its technology and begun bundling software to create a one-stop shop for customers. Upek is now the first and only silicon sensor vendor approved by the General Service Administration for deployment by Uncle Sam.
San Francisco-based Pay By Touch, which partners with both Upek and DigitalPersona, is also on the fast path with an potential IPO on it's slate. Having raised $300 million during the past six years in debt and equity financing from angels, including Craig Ramsey and the Gordon Getty Family Trust, and hedge funds like Scout Capital Management, the company now employs 800.
The most recent $60 million infusion, completed in January 2006, enabled it to acquire marketing company S&H Solutions and accelerate its own sales and marketing. Pay By Touch recruited Mayor Gavin Newsom's father, the Honorable Judge William Newsom, and Sapient co-founder Stuart Moore as board members and added former Home Depot executive vice president John Costello to its management team also in the past year.
The company now counts 3.5 million registered users, all paying for groceries, coffee, movies and other retail items by touching their finger to a reader at the point of purchase. User prints are linked to their bank, credit cards and other accounts, so once the print is authenticated, the bank processes the payment as usual.
"The market's really starting to explode. People no longer just think of biometrics as science fiction and on the edge," said President and COO John Morris.
Pay By Touch has systems installed in the United States, Britain and Citibank outlets in Singapore.
The company will offer Chicago motorists the chance to pay at the pump this spring.
So why is the age-old technology of reading fingerprints getting new growth?
Password fatigue is increasing while biometrics costs are decreasing. Morris said it costs $300 to install a Pay By Touch system in a checkout lane, compared with $2,000 three years ago. Said Morris: "It's about getting the technology rolled out and putting it where people can use it."
lwilson@bizjournals.com / (415) 288-4939
Biometric technologies (and the supporting software and integrators) raked in an estimated $2.1 billion last year. That's up $800 million from 1999 and on track to hit $7.4 billion by 2012, according to the International Biometric Group.
Retinal, fingerprint and facial identification technologies (and the supporting software and integrators) raked in an estimated $2.1 billion last year. That's up $800 million from 1999 and on track to hit $7.4 billion by 2012, according to the International Biometric Group.
"Before it was primarily a matter of survival. Now it is not," said DigitalPersona CEO Fabio Righi.Founded in 1996, the Redwood City company scored some initial interest from market movers Visa and Microsoft, but that only turned to cash in recent years. The 75-person company, which makes both fingerprint reading hardware and the software that supports it, secured customer Banco Azteca in Mexico last March. Eight million bank members registered initially, a group that has grown to 14 million. Although Righi declined to disclose revenue, he confirmed his company has been profitable since 2004, a major, and often postponed milestone.
Emeryville-based Upek, which sometimes competes with DigitalPersona, is also prospering. Having spun off from STMicroelectronics in 2004, the company logged its first full year of revenue in 2005 at $30 million. Last year it rang in $52 million and 2007 also looks strong. An IPO could be in the offing."Today, the biggest driver of our revenue is the notebook market," said CEO Alan Kramer, saying notebook customers IBM, Dell, Toshiba and Sony represent roughly 80 percent of the company's revenue.
Since Upek sensors debuted on IBM's Lenovo notebooks in 2005 -- the first widespread launch of biometrics to average consumers -- the company has fortified its technology and begun bundling software to create a one-stop shop for customers. Upek is now the first and only silicon sensor vendor approved by the General Service Administration for deployment by Uncle Sam.
San Francisco-based Pay By Touch, which partners with both Upek and DigitalPersona, is also on the fast path with an potential IPO on it's slate. Having raised $300 million during the past six years in debt and equity financing from angels, including Craig Ramsey and the Gordon Getty Family Trust, and hedge funds like Scout Capital Management, the company now employs 800.
The most recent $60 million infusion, completed in January 2006, enabled it to acquire marketing company S&H Solutions and accelerate its own sales and marketing. Pay By Touch recruited Mayor Gavin Newsom's father, the Honorable Judge William Newsom, and Sapient co-founder Stuart Moore as board members and added former Home Depot executive vice president John Costello to its management team also in the past year.The company now counts 3.5 million registered users, all paying for groceries, coffee, movies and other retail items by touching their finger to a reader at the point of purchase. User prints are linked to their bank, credit cards and other accounts, so once the print is authenticated, the bank processes the payment as usual.
"The market's really starting to explode. People no longer just think of biometrics as science fiction and on the edge," said President and COO John Morris.
Pay By Touch has systems installed in the United States, Britain and Citibank outlets in Singapore.
The company will offer Chicago motorists the chance to pay at the pump this spring.
So why is the age-old technology of reading fingerprints getting new growth?
Password fatigue is increasing while biometrics costs are decreasing. Morris said it costs $300 to install a Pay By Touch system in a checkout lane, compared with $2,000 three years ago. Said Morris: "It's about getting the technology rolled out and putting it where people can use it."
lwilson@bizjournals.com / (415) 288-4939
