In 2012, about 7 percent of all people aged 16 or older in the U.S. experienced identity theft, with their financial losses totaling $24.7 billion. Christopher Morton is familiar with the crime because in 2007, he had his identity stolen. Fortunately, the thieves were prevented from obtaining new credit cards, but Morton became interested in how identity verification systems work.
With co-founders John Backus and Alain Meier, Morton created BlockScore, an identity-verification startup and member of Y Combinator’s latest batch that is launching today with $2 million in funding from Battery Ventures, Khosla Ventures, Lightspeed Venture Partners, New Atlantic Ventures, Boost VC, Y Combinator, and several angels.
“John, Alain, and I worked on systems that required ID verification and knew how bad the vendors were,” Morton told me in an email.
“I built a payments system for the company I founded, Cube [a member of Y Combinator’s winter 2012 batch] that required ID verification for compliance and anti-fraud. Alain and John were looking into the remittance space. The same antiquated systems and business processes still existed when we looked for ID verification solutions last year.”
BlockScore was created as the solution to that problem and its target verticals are payments, prepaid cards, banking, marketplaces, Bitcoin exchanges, and sharing economies. Morton explains that BlockScore helps companies in those sectors by “reducing their compliance burdens for Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations,” which are designed to help protect consumers and businesses from identity theft and other forms of fraud.