“I know I don’t do well with idle time.”
Kirk Simpson is just one month removed from stepping down as CEO of Toronto-based Wave, and about to embark on his next venture. In a recent interview with BetaKit, Simpson spoke to the new idea that has him “super excited” and free of idle time.
Simpson has teamed up with early Wave investor Peter Carrescia to launch a company focused on decentralized identities, called Qui Identity. Things are moving fast for the pair: Simpson and Carrescia have secured $6.5 million CAD ($5 million USD) from a notable group of Canadian investors for what is essentially an idea.
The duo explained that they are still in the early stages, and yet to build a product, but are focused on accelerating the adoption of decentralized identity. The goal is to work with both consumers and businesses to make it easier and give them more control over how they share their digital information. The financing will help the company figure out what that product will be and add a modest team to make that happen.
“They have a proven history as entrepreneurs with Wave, and their success is unmatched.”
– Satraj Bambra, Round13
The Qui founders were able to raise the money for their idea so quickly because of their deep history and track record in Canadian tech. Simpson led Wave to its $537 million CAD exit to H&R Block in 2019, while Carresscia is known for being an early Wave investor as a founding member of OMERS Ventures alongside John Ruffolo. After a stint as head of Next Canada, Carrescia joined the Wave team in 2016 as senior vice president of strategy and corporate development, before departing to become a venture partner at Toronto-based VC firm Information Venture Partners.
“They have a proven history as entrepreneurs with Wave, and their success is unmatched,” said Satraj Bambra, managing partner at Round13 Digital Asset Fund, which led Qui’s round.
Bambra has known the Qui founders for some time, as he was an early developer at Wave in the mid-2000s. Bambra later founded B House, which was acquired by TWG, and BlockEQ, which was acquired by Coinsquare, before joining Round13 at the beginning of this year to manage its Digital Asset Fund.
A self-proclaimed early developer on Ethereum, Bambra will offer his Web3 experience as Simpson and Carrescia build out Qui.
Round13 was among a group of investors backing Qui that have a long-term history with its founders. OMERS Ventures, Wittington Ventures, and a group of undisclosed angel investors in the Canadian and American Web2 and Web3 spaces also invested in the round.
“Kirk and Peter are leaders that we have deep trust and respect for,” said OMERS Ventures Managing Partner and Head of Ventures Damien Steel, citing their “deep operating experience” and close relationship with OMERS.
The OMERS connections continue with Wittington, as the firm’s managing partner, Jim Orlando, also came from OMERS. There he served as managing director of the venture arm after Carrescia’s departure in 2012, before leaving to help create Wittington for the billionaire Weston family in 2019.
Teaming up felt like a natural fit for Simpson and Carrescia. The latter recalls how Wave was OMERS Ventures’ first investment out of its initial fund.
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“I met [Simpson] in January 2011, the first week that John and I started up OMERS Ventures, and then, within a few weeks, we had issued our first term sheet [to Wave],” said Carrescia, who led the Wave deal for OMERS.
Carrescia sat on the Wave’s board until his departure from OMERS in 2012, and between then and joining as an employee in 2016 has continued to support the company. Simpson said he considered Carrescia as an informal advisor to the company during that period.
“[Simpson] helped me take that company to exit,” said Simpson.
“We’ve just been together now for, I guess, almost 10 years in different kinds of relationships along the way,” added Carrescia. “But we’ve always synced together really well.”
Carrescia noted that the idea for Qui started and evolved over conversations with a variety of people at the beginning of this year. Carrescia, who started working on Qui full-time in June, holds computer science and business degrees, and prior to joining the Canadian venture ecosystem was helping to build public key infrastructure (PKIs), or the technology behind digital certificates, in the 1990s. He was a systems engineer at Lotus Development, which was bought and later sold by IBM.
“I’m on record as saying that I hate everything to do with accounting.”
Carrescia claimed that what Qui is doing is “just an evolution from that.”
“The challenge there was that companies had to run these verified data registries and it was all just within their own company walls, and it was hard to scale globally, especially in the consumer space,” he said. “But now that’s possible because of things like the blockchain.”
Simpson added that while at Wave he saw the struggle small businesses and consumers alike face trying to access or share digital identity information.
Simpson argued that the current digital identity market fails in that there is no universal buy-in from both the consumer and business perspective, calling it a “chicken and egg” problem.
“There are lots of smart people thinking about this space, don’t get me wrong, but the go-to-market has not been figured out,” Simpson claimed, citing a lack of control and trust between consumers, businesses, and third parties that share data.
For Simpson, it’s that universal problem that led him to launch Qui so shortly after leaving Wave. “I’m on record as saying that I hate everything to do with accounting,” said Simpson. “So, for me, it’s not necessarily the tech itself that interests me, it’s the problem we are trying to solve for users.”
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Simpson noted what the GDPR has done to give European consumers more control over their personal data – something that has also been discussed in Canada. “This is where the puck is going,” he said.
“So how do we bring some of our experience, that we had in building great UI and UX to solve complicated issues, to something that we think is really really important for unlocking more trust from both sides across the internet?”
It’s that operational experience that attracted Bambra to want to invest in Qui. “You don’t everyday sort of see top-notch entrepreneurs tackling crypto issues, and I think that’s what makes this very exciting,” Bambra said. “We think we can create a very important company in the space.”
“You don’t everyday sort of see top-notch entrepreneurs tackling crypto issues.”
Orlando echoed that sentiment, noting that in addition to betting on Qui because of its founders, the problem they are looking to solve is also very attractive. He claimed that is what led Wittington to break from its typical investment thesis and invest in Qui at this early stage (Qui also marks the first Canadian investment for Wittington).
Simpson and Carrescia are part of a growing group of Canadian entrepreneurs that are leaving their respective companies to tackle the Web3 space. Last year, Top Hat founder and former CEO Mike Silagadze left the digital education world to start a crypto asset management firm.
“The space keeps getting better people coming to build because they see it’s exciting,” said Bambra. “And there’s a whole new ecosystem and mechanism of understanding the economy and building in it and … the quality is just getting better and better.”
The digital identity market is a massive one, with reports placing the global market value at $23.4 billion USD last year and expecting that it will grow at a 16.8 percent compound annual growth rate through 2030.
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The primary factors for that growth are said to be an increase in identity-related frauds and data breaches, as well as the requirement for compliance from the likes of GDPR.
Simpson and Carrescia are far from the first people to identify an opportunity in the Web3 digital identity space. In recent weeks, Unstoppable Domains, which tackles digital identity from the web domain space, raised a $65 million Series A funding at a $1 billion valuation. Amongst Canadian unicorns, Trulioo is known as a leader in identity verification and has been increasingly working on the crypto space amid regulation requirements.
The Qui founders feel they are on to something unique, however.
“[The industry has] been very focused on folks that are passionate about Web3, and what I think we can bring is a lot of experience around how to build products that, at Wave, would be onboarding tens of thousands of small businesses every month,” said Simpson. “And to do that you need to make things really simple … That is what we can bring to this space, a bridge between Web2 and Web3 that brings some of this stuff more to the masses.”