Revolution Growth, a technology venture capital firm backed by AOL co-founder Steve Case and Washington Capitals owner Ted Leonsis, announced Wednesday that it is investing an undisclosed amount of money in Clear, a New York-based start-up focused on biometric identification systems. The investment management firm T. Rowe Price also joined the investment round.
Clear already has a visible presence in 27 U.S. airports, where passengers can sign up to use fingerprint and eye scanners in place of a driver’s license. But co-founder Ken Cornick said the long-term goal is to employ fast, easy biometric identifications systems anywhere consumers face the annoyance of proving their identity.
“Our vision really is that identity is the key to unlocking great, frictionless consumer experiences anywhere that an ID is needed,” Cornick said.
The company already counts about 3 million users who pay for the luxury of skipping lines at airports and sports arenas, with its most common subscription packages ranging from $79 to $179. Investor Steve Case said the company does “quite a bit” of annual revenue, though executives declined to disclose financial details. The Revolution Growth firm operated by Case and Leonsis invests in start-ups that already have a proven business model but need help scaling up.
Although airports are still at the core of Clear’s business, the company has been aggressively branching out to other markets. Some 13 stadiums across the country have made Clear available to season ticket-holders and others. The company recently announced a partnership with Hertz rental car company, and executives say they are engaged in discussions with health-care organizations and companies in the hospitality industry.
Case said he thinks Clear could become an “iconic” company as it finds new ways to replace more cumbersome sign-ins. It could be used to quickly check customers into hotels, he said, or seamlessly verify people’s age when they buy alcohol.
“When we started Revolution, we said we wanted to invest in companies that give people more choice, control and convenience in different aspects of their lives,” Case said in an interview. Clear “is right down the strike zone” when it comes to removing friction from people’s lives, he said.
Leonsis, whose Monumental Sports & Entertainment company owns Capital One Arena, the Washington Wizards basketball team and the Capitals hockey franchise, said Clear’s technology should allow building managers to set up security systems that don’t annoy customers.
“From my perspective owning an arena, I know that safety is mission critical jobs one, two and three,” Leonsis said in an interview. “And while you’re providing that, it’s also what people complain about.”
Whether the company succeeds could depend on whether enough customers can stomach its high annual fees. Executives say the company does not get any government funding for its work; much of its revenue comes from customer fees, which are then shared with the airports it works with.
Executives Caryn Seidman Becker and Ken Cornick took control of Clear’s core technology assets out of bankruptcy in 2010 after an earlier executive team failed to withstand the economic head winds caused by the recession, Cornick said this week. “Like any good idea you have to get the timing right,” Cornick said. “Now, biometrics are pervasive, but when we launched this business there wasn’t even a fingerprint reader on the iPhone.”
The company’s investors acknowledged they are taking a risk by betting on an idea that has failed before. But they say they’re confident in the current incarnation of Clear, now in its ninth year and generating a healthy revenue stream as it moves to diversify its business.
“Sometimes you find the falling angel, sometimes you catch the falling knife,” Leonsis said. “Clear [was] a falling angel. In its first iteration, it was a little too soon. But like with anything in technology, it gets smarter, better, cheaper, more perfected as time goes on.”