Identity-Proofing Startup Trusona Announces $8M in Series A Funding
Twenty minutes. That’s how long it took for ex-confidence trickster turned security expert Frank Abagnale to convince Ori Eisen to quit his fraud director job at American Express.
“Nobody will know what was said in those 20 minutes,” Eisen said, declining to give specifics about the conversation that took place in a limousine. “But here’s what Frank told me in the car at the very end, ‘If what you’re telling me is true and you can do all of these things, I highly suggest you leave American Express, and I will help you.’”
So he did. After Eisen quit his job and founded cybersecurity company called 41st Parameter, Abagnale came on as adviser, and the two grew the business until it was acquired by Experian for $324 million in 2013. Today, Eisen’s newest company, Trusona, launches out of stealth mode with an $8 million Series A funding from Kleiner Perkins Caufield & Byers. (Fortune reported the funding in January before it was officially announced.)
Trusona is an identity authentication firm that offers in-person identity-proofing, secure distribution of a TruToken and patented anti-replay technology. In other words, it makes it really, really safe to wire millions of dollars, log into a restricted computer network or access an authorized social media account. Here’s a demo of how it works:
Trusona’s beta clients include top banks, brokerage accounts and healthcare companies. “All of the companies we work with are Fortune 500 companies or government agencies,” Eisen said.
The technology has been in use for the last six years inside of ATMs in Chile. During that time, it has reportedly undergone 119 million transactions with zero fraud. Eisen made a bold statement: “That’s why we can guarantee that after we meet you, verify your identity, give you this token and register your card, there is no technical possibility of another card coming in and looking like you. It’s just impossible to do.”
Abagnale, who was portrayed by Leonardo DiCaprio in the film Catch Me If You Can, has been an adviser to the company since its inception. Fortune sat down with Eisen and Abagnale to learn more about their relationship, the new company, and why this technology needs to exist today.
How did you and Frank first meet?
Eisen: When I was at American Express axp, the guy who was the head of counterfeit fraud had moved on. So my boss said, “You’re not just going to do Internet fraud. You’re now also going to do counterfeit fraud.” I knew nothing about counterfeit fraud. I started Googling and all roads led to the best guy in the industry – Frank Abagnale. I called his office, and they told me Frank doesn’t take new customers.
What you’ll learn about me is that I don’t give up easily. I courted Frank for a few months because I realized I didn’t want to waste my time. I wanted to learn from the best. It took about four months until I got a call back from his office and they told me, “Frank is going to be in San Antonio. He has 20 minutes between the speaking arrangement and his hotel. If you want those 20 minutes of his time, you have them.” I said, “I’m coming.”
Frank convinced you to quit your AmEx job, he came on as an adviser to your new company called 41st Parameter, and then you sold it. How did Trusona come about?
Eisen: On March 18, 2010, we saw for the very first time in our labs, the Session Replay, which means it’s a perfect copy of a session that’s been seen before – it’s just that this time it’s coming from the bad guys. So if I’m a CFO that moves $10 million on Monday, and someone with malware listens, then on Wednesday, they can send $20 million to themselves with the same exact username, password, IP address and certificate. Everything is the same, so how can you tell the difference? I reached out to Frank and I said, “There’s one more thing to do before I can retire and say we’ve done everything possible to secure the Internet.” The reason Frank joined this ride is that the way we work together is very symbiotic. I can write the best algorithm and technology, but I can’t do what he does.
Frank, what is it that you can do that Ori cannot?
Abagnale: We worked together on 41st Parameter for 10 years, and a reporter in Hong Kong asked Ori, “Frank Abagnale does not write code… So how does Frank Abagnale code?” And Ori said, “No, he doesn’t write code, but I’m not a criminal. When it comes to social engineering, no one knows more than him, and that’s why he’s been at the FBI for 40 years.”
[Eisen] develops it, he brings it to me and we basically play chess. He makes a move, I combat it, and then we go back to the lab and work on it all over again. We do that until the day I say to him, “OK, as far as I’m concerned at this point in time, it’s foolproof.” And that’s when 41st Parameter went out to the market. That’s the same way we approached [Trusona]. We look at every feasible way to defeat it over and over again.
You are involved in a few cybersecurity ventures and you also have your own security business. What did you see in Ori that made you want to work with him?
Abagnale: To be honest, I get so many people coming to me with ideas. Most of it is just foolish stuff, and most of it doesn’t work. When Ori got in the car, the first thing I noticed was that he was an extremely ethical person and that he had great character. All the qualities that I look for in people, I saw in him. In those 20 minutes, I knew he had the knowledge, so I encouraged him to leave American Express.
[Eisen] could’ve just said, “I’ve made a lot of money. I’m done.” But within six months, he told me, “We need to do one more thing because we haven’t closed the gap yet. We need to make sure we can verify who is on the other end of that computer.”
Do you think the gap’s now been closed?
Abagnale: We’ve sent it out to the best labs in the world for all of them to try to break it, and no one’s been able to break it yet.
Ori, you sold your first company, and you just raised $8 million for your second company, Trusona. What advice would you give entrepreneurs about raising funds and exiting successfully?
Eisen: Don’t raise money when you need it. VCs can smell fear. Raise money when you don’t need money. Have the relationship when you don’t need it. Also, If you don’t have passion, don’t do it. You will fail. A lot of people want to become a SEAL, a lot of people want to become a pilot. If you don’t come with a maniacal obsession, you will fail. If you don’t have the hunger, don’t start. Don’t be a “wantapreneur.”