ID.me Share Sales May Point to IPO: Report

ID.me is enabling its employees and early investors to sell shares in a new deal that values the company at approximately $1.8 billion, reports Bloomberg. The valuation marks an increase from ID.me’s previous valuation of $1.73 billion established during a funding round two years prior.

Prominent investors participating in this tender offer include Ribbit Capital, Viking Global, and CapitalG. The offer, which opened recently, is expected to close by November 1, allowing stakeholders an opportunity to liquidate shares within a specified timeframe.

As part of this tender offer, $67 million has been made available to purchase shares from existing shareholders. ID.me itself is not selling any new shares at this time. This approach allows the company to provide liquidity to early investors and employees without diluting current ownership or seeking fresh capital.

The tender offer comes amid speculation that ID.me may prepare for an initial public offering (IPO) in 2025 if market conditions prove favorable. The company reported revenue of $130 million last year, with expectations for substantial growth in the upcoming year.

ID.me has attracted significant attention in recent years due to its role in assisting government agencies, particularly during the COVID-19 pandemic. However, the company faced scrutiny in 2022 when a U.S. House committee alleged that ID.me may have misrepresented the extent of fraud within the U.S. unemployment insurance system. ID.me has continued to stand by its initial findings and asserts that its analysis of fraud data was accurate.

ID.me also faced significant controversy with the IRS in that same year over its use of facial recognition technology for taxpayer identity verification. Initially, the IRS planned to require taxpayers to use ID.me’s facial recognition, sparking backlash from privacy advocates, government officials, and the public. Critics argued that the system was invasive and risked privacy violations, especially given ID.me’s use of one-to-many facial matching, which compares an individual’s face to a large database of images, increasing the potential for false matches. Congress launched a formal investigation that April.

Nevertheless, the IRS has continued its partnership with ID.me. Earlier this year, it raised some eyebrows with a process directing users filing Freedom of Information Act requests to the digital identity verification service.

Source: BNN Bloomberg

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October 14, 2024 – by the ID Tech Editorial Team