Berlin- and Reykjavik, Iceland-based identity management startup Authenteq Ltd. today announced that it has closed a $5 million funding round in just two weeks.

This funding represents the first close of two in the company’s Series A round led by Draper Associates and Capital300 GmbH. The latest round brings the total invested in Authenteq to $7 million since 2015.

Authenteq provides a blockchain-based distributed ledger solution for extremely rapid identity verification for companies in need of “Know Your Customer” capabilities for highly sensitive industries such as finances which need to abide by anti-money-laundering regulations.

“I believe that Authenteq is the beginning of the solution to true and pure identity, which may eliminate many of the security concerns in the market today,” said Tim Draper from Draper Associates, who is known for investing in the likes of Skype Ltd., Tesla Inc., Coinbase Inc. and Twitch Interactive Inc. “Their product is simple and elegant.”

The startup also provides a service that helps companies contend with “trolling,” or harassment and bad behavior on social forums, with Trollteq. Using this blockchain system, community managers get identity management while also being able to better authenticate and prevent hostile users from easily making extra accounts, also called “sock puppets,” to avoid bans and punishments.

To provide its service, Authenteq uses an artificial-intelligence-driven identity verification process using facial recognition to check photos taken by users and verified identity documents, such as passports or other government-issued IDs, in order to authenticate real people. The image of the person, along with certain vital information, forms what the company calls an “eID” on their phone that is then encrypted and duplicated on the blockchain network.

When a company needs to verify that user, the mobile phone becomes the identification that can then be compared securely against the information stored in the blockchain to prove the person is whom he or she claims to be.

According to McKinsey and Co., the global mobile verification market is currently estimated at approximately $10 billion and is expected to double within the next four to five months. “We have been looking at the space and see that the need for KYC and identity verification solutions is huge and growing further,” Capital300 founder Peter Lasinger said.

Authenteq currently employs 22 people between its two offices in Berlin and Reykjavik. The startup will use this new funding to expand and hire for a new range of positions currently opened to fulfill new opportunities arising in the identity management industry.

“We are lucky enough to have our offices in two of the coolest cities in Europe at the moment,” said Kari Thor Runarsson, chief executive of Authenteq. “So convincing talent from all over Europe and the USA to move to either Berlin or Reykjavik hasn’t been that difficult.”

The company claims it has issued more than 150,000 eIDs using its system, which is more than all of Iceland’s issued national eIDs. Authenteq can also accept more than 3,500 different types of identity documents to aid with verification, including most government-issued photo IDs. The system connects to more than 10,000 data sources capable of corroborating identity across the world and operates in more than 190 countries.

Image: Authenteq