Avast, a Prague-based digital security and privacy company, is acquiring the Toronto-based authentication startup, SecureKey Technologies.
Avast, which claims it has over 435 million users, intends to use SecureKey as the base for its digital ID business. The terms of the acquisition were not disclosed.
Avast cited the maturity of SecureKey’s technology, and what it called a history of strong operational delivery in Canada for financial service and government customers, and said the acquisition would position Avast for expansion, particularly in Europe.
“SecureKey has grown into a world leader in building digital identity networks, probably more than anyone else on the planet.”
The European Union is currently spending hundreds of millions of dollars to bolster cybersecurity.
“As the European community is investing in public-private sector digital identity infrastructure in 2022 and beyond, we see Avast well-positioned as a collaborative provider of digital trust services for people, digital businesses and government,” said Charles Walton, general manager and SVP Identity at Avast.
The deal is expected to close in early April 2022 with the general availability of SecureKey’s products following in the second quarter.
Interac acquired the exclusive rights to SecureKey’s digital ID solutions in Canada in late 2021, and that may have been one of the prompts for Avast’s acquisition of SecureKey.
Aran Hamilton, the co-chair of the annual conference Identity North – which hosts forums on digital identity and the digital economy – told BetaKit that the Interac deal proved that SecureKey’s technology is ready for licencing.
“I think, if anything, it strengthens the deal,” Hamilton said. “Interac locking it up for seven years as the biggest, trusted brand in transactions in Canada, it only supported their technology is ready for scaling.”
Greg Wolfond, SecureKey’s founder and CEO, echoed that the deal with Interac didn’t hinder things. “The ability for us to deliver and do a good job with Interac and make them a showplace is what counts, and we certainly saw Interac as a showplace client,” he told BetaKit. “It’s good for them [Avast] to have a showplace customer in a showplace country like Canada.”
Founded in 2007, SecureKey provides authentication and security systems to connect people with commercial digital services such as online banking. For its part, Avast may be best known for its virus protection program, but in recent years the company has positioned itself as a digital identity protector for consumers and businesses.
Hamilton noted that Avast’s acquisition of SecureKey, combined with its acquisition of Utah-based software startup Evernym, the Prague firm has what he believes is the world’s largest concentration of digital identity experts now. “It’s a great play for them,” he said.
Avast acquired Evernym in late 2021. That Utah-based software startup claims that it gives people autonomy over their online presence by keeping their personal information, rather than in centralized databases.
Ondrej Vicek, the CEO of Avast, said the company “envisions a global and reusable digital identity framework which will underpin a new trust layer for the internet. It’s clear that digital identity is the critical enabler for many digital services and SecureKey’s success reflects the growing demand for this from consumers.”
Services developed by SecureKey include those currently known as Verified.Me, which it claims is a first-of-its-kind, distributed digital identity verification network, and Government Sign-In by Verified.Me for convenient login to hundreds of government online services and applications.
The startup claims that its digital identity solutions enable over 200 million secure digital ID transactions per year globally.
Wolfond said SecureKey’s some 116 employees will remain intact, staying in Canada, and will continue to provide support to Interac. As well, SecureKey joins Avast’s Digital ID unit. Avast has about 1,900 employees.
“SecureKey has grown into a world leader in building digital identity networks, probably more than anyone else on the planet,” Hamilton said. “They are respected and more importantly, their technology and approach are both good for consumers, as evidenced by Interac licensing the technology for the next seven years for Canada.”
Hamilton said the time has come to look beyond the Canadian borders. He noted that the global industry is starting to consolidate around some global standards and approaches. “It’s important that we protect the SecureKey work and their investment and enshrine some of the great key Canadian principles and philosophies that are baked into SecureKey into those global standards and global approaches, and you can only do that with scale,” he noted.
Those Canadian philosophies around the use of digital identity include being respectful of privacy, minimizing the movement of data, and placing consumer choice and power in the forefront. “These are all Canadian philosophies that are not necessarily supported on a global basis,” Hamilton said. “So, the most important thing is to get SecureKey’s technology to scale. We need players that have a global footprint and can have a global impact.”
SecureKey has raised $91.1 million in funding to date over eight rounds, along with one grant. The startup’s most recent funding round came in 2016 when it raised $27 million to fund the commercial rollout of its privacy-enhancing digital identity network.
“Avast is bulking up and really thinks there’s a great opportunity to make digital identity work for people where you control your identity and consent to where you share it, the kinds of things we pioneered in Canada,” Wolfond said. “They want to be able to take that to the rest of the world and we’re a big piece of the puzzle. It helps get this great Canadian technology out to the world.”