Biometrics and digital identity M&A in 2024

By Alan Goode, CEO and Chief Analyst at Goode Intelligence

As we approach the end of yet another year – a particularly turbulent year for the world – it is an obvious time to reflect on what 2024 has meant from an M&A and investment perspective for the biometrics and identity industries and take a peek in what 2025 has in store.

It’s been a very busy year for us at Goode Intelligence and we have spent a significant amount of this time involved assisting companies in M&A activities. Much of this work remains under the covers and tightly bound by NDAs but what it does do is to provide us with insight into the health of the industry. I am sharing this insight with you.

2024 has been more about consolidation then investment with a significant increase in M&A activity.

A lot of this activity has been about leveraging biometric and digital identity technology to support real business needs and to reflect digital transformation strategies. In particular, supporting composable platforms with flexible workflow solutions that align with business requirements and process – meeting the need for agile digital solutions to support modern digital life.

For instance, our work in the travel industry has identified the need for end-to-end passenger services that support couch-to-gate solutions that the industry demands. The ability to book and manage travel tickets from home, present, and authenticate, your travel documents before you travel, and then seamlessly navigate the airport, train station, or port using enrolled biometrics where the security risk allows it. Travel digital identity has shown other industries that portable, standard-based, high security biometric-powered digital identity can be delivered at scale.

In the Goode Intelligence market analyst report, “Travel Digital Identity – Seamless Travel Powered by Digital Identity” we forecast that the market will grow to $4.6 billion by 2029 with a CAGR of 22 percent. It is no surprise that suppliers of biometric and digital identity technology are aware of this opportunity and are growing their business and product portfolio through acquisition.

To meet this opportunity, we have seen some notable M&A activity. Notably, Amadeus’s acquisition of Vision-Box, a leading supplier of biometric solutions for airports, airlines, and border control customers in April 2024.

Entrust’s acquisition of WorldReach in 2021, leading IDV supplier Onfido’s of Airside Mobile in 2023, and then Entrust adding Onfido in 2024, has turned the North American security company into a real contender for delivering biometric digital identity to the travel industry, albeit at a significant cost to the privately controlled group.

It has been no secret that Advent International has been looking to break up and sell Idemia’s business units and in September 2024 Idemia announced that French-based identity specialist IN Groupe had begun exclusive talks to acquire the Smart Identity business unit to enable them to expand their capabilities, on both a product and a regional-reach basis. Like Entrust, IN Groupe has been busy with M&A and also announced in November 2024 the acquisition of Denmark’s digital identity service, MitID. Not only is this a recurring business line for In Groupe but also a great opportunity for knowledge transfer, to exchange capabilities from MitID to other business lines within the IN Groupe. This could be a very timely acquisition in the context of a ramp up of activity in digital identity within the EU with its digital identity initiatives including the EU Digital Identity Wallet and eIDAS 2. Through acquisition, IN Groupe is quickly becoming a major player in the European identity sector and potentially beyond.

There is no doubt that we are well down the path to migrating government-issued physical identity documents to digital identity solutions. This journey will include both physical identity documents and digital identity solutions coexisting. Identity suppliers, especially in the government sector, need to be able to operate in both the physical and digital worlds, including the support of hybrid models where physical identity document and digital identity issuance and management coexist. This strategy is being adopted by the major suppliers of government identity and is exemplified by many of the M&A examples that I have discussed in this article including Toppan Gravity’s acquisition of HID’s Citizen Identity division in October 2024. HID’s Citizen Identity division was itself acquired from UK-based De La Rue in 2019. I worked for De La Rue at the turn of this century, as head of digital identity, with a brief of bringing the 200-year-old company into the 21st century with digital identity solutions to complement their document identity solutions. It was probably an exercise that was a little bit too early, pre-dating the availability of the modern mobile phone. It did provide me with much of the real-world experience that is so invaluable to my role as an analyst and futurist today.

Companies are scaling their portfolio with acquisition to reflect the hybrid nature of government issued identity, supporting both traditional document-based identity with digital identity. Expect more of the same in 2025.

Identity Verification (IDV) has been an amazing success story for supporting digital onboarding with double-digit year-on-year growth for suppliers in the market. Its success, and the desire to own IP, has meant that security and fraud management platform owners are looking to own this critical piece of technology.  In addition to Onfido’s acquisition by Entrust we also have LexisNexis Risk Solutions (LNRS) acquiring another leading IDV provider, IDVerse, a provider of AI-powered automated document authentication and fraud detection solutions. The acquisition was announced recently in December 2024 and comes off the back of the company acquiring behavioral biometrics specialist, BehavioSec in 2022.

For 2025, I predict further consolidation and also an uptick in investment – something that has seen relatively low activity in the last two years as a result of the credit crunch.

Businesses are definitely seeing the benefit of embedding biometric technology to support the customer / citizen journey and this will reflect in more M&A activity in 2025 to support biometric-powered digital platforms across all major sectors.

I also expect greater interest and activity in coupling biometrics with digital wallets. All eyes are on the EU and its digital identity wallet. What happens in 2025 in the EU will have significant impact in digital wallets around the world.

Biometrics is seen as a critical enabler of Verifiable Credentials (VCs) and if the industry can resolve some of its chicken and egg conundrums, then expect plenty of investment and M&A activity here.

I am excited to see what 2025 brings us and expect a busy year for Goode Intelligence and Biometric Update.

About the author

Alan Goode is CEO and Chief Analyst at Goode Intelligence. Reach out via LinkedIn to discuss this article.

Article Topics

acquisitions  |  Amadeus  |  biometrics  |  digital identity  |  Entrust  |  Goode Intelligence  |  HID Citizen Identity (HID CID)  |  IDEMIA  |  IDVerse  |  IN Groupe  |  LexisNexis  |  Toppan Gravity