December 7, 2017 -
As the biometrics industry continues to grow, Biometric Update is bringing a new focus to the stories around the stocks in the sector. Check in with this space each week for a rundown of the financial news and interesting ideas from the week that was.
Swedish biometrics firm Fingerprint Cards AB recently issued a notice addressing market rumors. Some market participants had, apparently, been speculating about the possibility the company was preparing for a possible takeover bid. The company had received a letter from a Chinese company suggesting a possible bid. The offer was much too low, apparently. Per stock exchange rules the company had to release an official notice that the letter had been received. Listed companies have be sure that information pertinent to the company has been widely shared and is not being retained internally, hence the recent notice. According to the statement,
“Fingerprint Cards notes this morning’s media and market speculation regarding the preparation of a possible takeover bid for the company’s shares. In accordance with the company’s policy… The company had received a letter regarding the preparation of a possible takeover bid for the company’s shares. Since the overall assessment is that the probability for the offer plans being realized is low, the company does not consider that the information constitutes insider information.” Shares in the company did rise sharply in the last week of November, hitting SEK 19. 35 (USD $2.28). In the days after the announcement the shares sold off as it become clear no acquisition was imminent. Shares have slipped back since then to under SEK 16.00 (USD $1.89).
Other market news involves a company from South Carolina called Integrated Biometrics LLC recently raised $2 million through a privately-placed equity financing. The company has developed a line of small, light, FBI-compliant fingerprint scanners. One of the company’s contracts involves a program in Pakistan that is funded by the World Bank and the Pakistan Education Department. The company’s scanners are being used to verify the identity of teachers in remote areas of Pakistan. According to a press release the program could involve up to 150,000 educators. The ultimate goal according to the company is to have, “… real-time attendance monitoring in each village.” According to a press release the funds raised in the recent financing will by used to, “… support the company’s rapid global growth…” The company’s CEO, Stephen Thies, was quoted as saying that, “Demand for our solutions continues to increase at a tremendous rate. That’s why we’re on both Inc. Magazine’s 5000 and the South Carolina 25 Fastest Growing Companies lists for two years running. This growth capital addresses working capital needs, enables capacity improvements, and supports engineering projects that will bring exciting new features to our product line.”
As for the wider biometrics sector this past week, action has been fairly muted. With the end of the latest quarterly earnings release season, management is back at work. Market-changing news such as earnings releases have tailed off, and so stocks in the sector seem to be moving along with the general market, rather than moving based on individual company news. Over the past week the general trend for technology stocks has been to drift a bit lower. This in line with the trend in overall markets. Broad stock indices have been trading sideways or down slightly over the last week as the continued chaos in the Trump White House seems to be tempering growth in generally richly-valued shares.
But even as financial market news is slow it seems the flood of stories about biometrics companies is stronger and deeper than ever. It is fair to say the biometrics sector is blossoming in terms of both technical innovation and corporate development, and so the number and type of ideas floating around the sector is greater than ever.
A new name for this column is an interesting outfit called HooYu. The online service considers itself an online identity confirmation service. According to the firm if someone is interacting with another person online and they need to be sure the person they are interacting with is who they say they are, the interlocutor can ask to do a HooYu ID confirmation. Utilizing a phone number or email address the counterparty receives a HooYu link. Clicking on the link kicks off a process where by HooYu then uses, “… online and social media identity data, ID documents and facial biometric checks to prove that a person is who they say they are… Once HooYu has checked and confirmed an identity, both parties receive an identity report.” The online service is interesting in that it seems to be finding a niche in the burgeoning fintech (financial technology) sector. Most recently HooYu announced it will provide verification services for a UK bank called Countingup. The firm is what the Brits call a “challenger bank,” a UK term for a small bank that is not one of the major four national banks. In Countingup is a bank that exists entirely online. Founded by the person who also created the online software accounting product Clear Books, Countingup is a digital bank targeted to the more than four million people in the UK who are “sole traders,” that is, people who run a company that is made up of a single person. The bank exists as an app on a smartphone. After downloading the Countingup (for iOS or Android) the user can open an account in just five minutes. Confirmation of identity happens through the HooYu service. The account then offers all the needed UK bank, branch and account numbers, as well as a contactless Mastercard. The Countingup app will automate accounting and reconciliation of expenses. It will submit tax returns, generate a profit and loss report and create invoices. The bank only began operating this past fall. But the idea seems an obvious one for the swelling ranks of contract and freelance workers. A recent venture financing round saw a firm, Frontline Ventures, invest €750,000 (about USD $882,990) in the idea. The founder of the company has been quoted as saying the app is designed to appeal to anyone annoyed with the declining customer service and rising fees at major national banks. Let’s hope something similar pops up in North America.
Tune in next week for a list of some of the most ridiculous new uses of biometrics technology.