SQR folds under funding pressure amid UK’s uncertain digital ID landscape

Isle of Man-based digital identity service provider SQR is winding down operations. The decision following a failure to secure funding necessary to continue operations reduces the number of UK-certified Digital Verification Service (DVS) providers by one.

SQR Group was originally certified against the UK’s Digital Identity and Attributes Trust Framework (DIATF) as an Identity Services Provider (IDSP) and Attributes Service Provider (ASP) back in 2023. Its service portfolio included digital identity verification, KYC and AML checks.

The company had gained some traction, particularly in its home territory. SQR was selected by the Isle of Man to provide identity verification of beneficial owners for the island government’s Central Registry for businesses in 2024, and it joined the Select ID Reusable ID Network last year.

SQR even struck a new deal with dedicated Isle of Man AML and CFT compliance platform Proofdesk just weeks ago to build in identity checks.

But in the midst of these integrations, the company was acquired by SQRx in September, 2024. SQRx Ltd was founded in March, 2024 with investor Grahame Chilton, former co-owner of insurance company Benfield Group, as its main shareholder.

The company says in a LinkedIn post that it recently initiated a strategic growth funding round to finance the next phase of its technology roadmap, but “(d)espite intensive efforts and strong engagement across the market,” was not successful.

SQR’s Board of Directors and executive leadership made the difficult call to terminate services as of July 31, 2026, deleting all customer data.

Uncertainty undermines investment opportunities

Comments under the post indicate a common position among executives with DVS providers that the uncertainty introduced into the UK’s digital identity verification market by a series of policy changes and delays related to ID has made for highly challenging investment conditions.

Indeed, the industry made clear to the Department for Science, Innovation & Technology (DSIT) in survey feedback that the government must do more to support a domestic market for digital trust services that it has created and now risks allowing to wither on the vine.

“There are several UK market focused ID businesses that have so much potential but haven’t been able to raise funds over this period as potential investors have understandably steered clear,” observes Yoti CEO and Co-founder Robin Tombs.

Article Topics

biometrics  |  digital verification service (DVS)  |  DVS Trust Framework  |  Isle of Man  |  SQR Group  |  UK digital ID