Whitefish-Based Neuro-ID Raises $35 Million Series B, Provides Behavioral Analytics for Online Businesses
The Neuro-ID team poses outside of Whitefish Lake Lodge. The company just closed out one of the largest series B rounds in state history at $35 million. Photo courtesy Neuro-ID.
November 22, 2021
By Courtney Brockman
Neuro-ID, a Whitefish-based company that interprets digital behavior to help online companies better understand the intent and experience of each customer, has just closed one of the largest Series B rounds in state history at $35 million. The funding will help the company hire more employees and expand globally.
Led by Canapi Ventures, the investment takes place as Neuro-ID is rapidly expanding in both revenue and customers, with recognizable names like Intuit, Square, Affirm, OppFi and Elephant Insurance using its platform. The company’s Human AnalyticsTM platform has helped decrease fraud by 35% while increasing conversion 200% in digital transactions.
Through analyzing the “digital body language” of taps, types and swipes, Neuro-ID’s Friction Index measures what causes customers to abandon an online process – essential for companies that have moved to digital transactions during the pandemic, said Neuro-ID CEO Jack Alton.
“When we're in person, or even on Zoom, we're picking up on these nonverbal cues, the tone of voice, the body language - all these things help us read and understand how we should interact with one another,” Alton said. “When we moved online, this digital gap was created between companies and their customers. What the technology’s really doing is helping you understand the experience and intent of the person on the other side of the screen for the very first time.”
As research shows only 1 out of 10 people that start a digital journey finish it, Alton said the key is to not treat all customers the same. By detecting the behaviors of genuine customers from a fraudsters or automated bots, organizations can make the journey to conversion as pleasant as possible.
Neuro-ID’s tool focuses on how a customer inputs information.
“If you were sitting across a desk from me at a bank, and you're coming in to consolidate your credit card debt or to get a student loan refinanced, and I watched you change your first name three times, saw you struggle to put in your social security number and that you didn't know your address, you weren't pulling it from your long-term memory,” Alton said. “All of our spidey senses would start going off, and we’d be like, ‘Something's up. This person is not who they say they are.’”
According to Alton, e-commerce expanded more in 90 days than in 10 years and grew to five times as much traffic during the pandemic. As the culture of work has shifted with some employers not requiring employees to go back to the office, Alton said the trend will continue to push retailers to offer convenient and efficient digital options.
“The value of a retail branch was you interact with your customer, you had those key touch points with them,” Alton said. “Our technology is going to have to help decrease the distance between a brand and their digital customer. That's what they're using us for - is to not only land the customer, but also build lasting digital relationships with that customer.”
Included in MHTBA’s 2019 list of Montana Startups to Watch, Neuro-ID has tripled from 20 employees to 60 since 2020, with about one-third based in Montana. Alton hopes to have over 100 employees by next year and is hiring engineers and data scientists both locally and nationally.
Neuro-ID was honored in Times Square after closing its series B funding. Photo via Neuro-ID.
Neuro-ID’s location in Northwestern Montana has been an asset in attracting both investors and talent.
“Before COVID, everybody would tell me there’s no way you can build a big software company in Whitefish, Montana,” Alton said. “Being headquartered in Whitefish has gone from kind of a curious notion as to why you would do that to the coolest place to have a headquarters. If I'm programming in D.C. or San Francisco or New York, I get to come out to Montana once or twice a year to our corporate office and go skiing and interact with all my team members there.”
Initially privately funded, Neuro-ID raised $7 million in Series A funding in December 2020. In anticipation of raising a Series B round, the Neuro-ID team hosted Canapi from Washington D.C., as well as other current investors Fin VC and TTV Capital from San Francisco and Atlanta, for fly fishing and Whitefish’s Under the Big Sky music festival in July.
“When they arrived here in Whitefish, they were blown away by the culture that they saw, they were blown away by the beauty of everything around us,” Alton said. “And by spending a couple of days in Montana with our employees, they were able to develop a level of conviction that actually made them preempt the series B.”
Alton said it is encouraging to entrepreneurs that they don’t necessarily need to move to a major metropolitan area to scale.
“Now is the best time ever to start a software-based company in a beautiful place where you can live, work and play where you want and attract the talent you want,” Alton said. “And we're proving it in little Whitefish, Montana.”
