Pindrop raises $90M to bring its voice-fraud prevention to IoT devices and Europe
When it comes to how humans communicate with each other or with machines, voice is a major interface, with growth in the latter fuelled by the rise of artificial intelligence, faster computing technology and an explosion of new devices — some of which only, or primarily, work with voice commands. But the supreme reign of voice has also opened a window of opportunity for malicious hackers — specifically, in the area of voice fraud.
Now, a security startup called Pindrop is announcing that it has raised $90 million to tackle this with a platform that it says can identify even the most sophisticated impersonations and hacking attempts, by analysing nearly 1,400 acoustic attributes to verify if a caller or a voice command is legit.
“We live in a brave new world where everything you thought you knew about security needs to be challenged,” said Vijay Balasubramaniyan, co-founder, CEO and CTO of Pindrop, who built the company (with co-founders Ahamad Mustaque and Paul Judge) originally out of his PhD thesis.
The funding is a growth round aimed specifically at two areas. First, taking US-based Pindrop into more international markets, starting with Europe — Vijay spoke to me in London — and coming soon to Asia. And second, to expand from customer service scenarios — the vast majority of its business today — into any applications that use voice interfaces, such as connected car platforms, home security devices, smart offices and smart home speakers.
To that end, this Series D includes a mix of strategic and financial investors: led by London’s Vitruvian Partners, it also includes Allegion Ventures (the corporate venture arm of the security giant), Cross Creek, systems integrator Dimension Data (“As you grow you want to be able to sell through partners,” Balasubramaniyan says), Singapore-based EDBI (to help with its push into Asia), and Goldman Sachs. Google’s CapitalG, IVP, Andreessen Horowitz, GV and Citi Ventures — all previous investors — were also in this round.
(The latter group of investors also has at least one strategic name in it: Pindrop is already working with Google, the CEO said.)
Valuation is not being disclosed, but in Pindrop’s Series C round in 2017, the company was valued at $600 million post-mioney, according to PitchBook, and the valuation now is “much higher,” Balasubramaniyan said with a laugh. The company’s raised $212 million to date.
The crux of what Pindrop has built is a platform that makes a voice “fingerprint” that identifies not just the specific tone you emit, but how you speak, where you are typically calling from and the sounds of that space, and even your regular device — something we can do now with the rise of smartphones that we typically don’t share with others — with each handset having a unique acoustic profile. Matching all these against what is determined to be your “normal” circumstances helps to start to build verification, Balasubramaniyan explained.
Founded in 2011 in Atlanta, GA, most of Pindrop’s business today has been built around helping to prevent voice fraud in customer service engagements. That business, Balasubramaniyan said, is on the path to profitability by the first quarter of 2019 and continues to grow well, with a voice fraud problem in the space that costs the industry $22 billion ($14 billion in fraud, $8 billion in time and systems wasted on security questions). (Pindrop claims it has stopped over $350 million in voice-based fraud and attacks so far in 2018.)
Current customers include eight of the 10 largest banks and five largest insurance companies in the U.S., with more than 200 million consumer accounts protected at the moment.
“There are 3.6 million agents in customer service jobs in the UK, with one in every 89 people in the US in this role,” he noted. “But last year, there there were 4.4 million new assistants added to the market,” referring to all the devices, apps and services that have hit us, “and that’s where we realised that it’s about expansion for us.”
In cases like connected home or office scenarios, some of the ways that these might get hacked are only starting to become apparent.
Balasubramaniyan noted that it can be something as innocent as a little girl ordering an expensive doll house while playing with Alexa (Pindrop is also now starting to work with Amazon, too, as it happens), or something more nefarious like a fraudster calling your answering machine to command your smart home hub to unlock your front door.
But we are unlikely to turn away from voice interfaces, and that is where a company like Pindrop (as well as competitors like Verint) come in.
“Voice-enabled interfaces are expanding how consumers interact with IoT devices in their everyday lives – as well as IoT manufacturers’ ability to offer smarter and stronger solutions,” said Allegion Ventures President Rob Martens, in a statement. “We’re excited about the future of voice technology and see Pindrop as a pioneer in the space. We look forward to working with Vijay and his team to accelerate the adoption of voice technology into new markets.”
More generally, as we see the rise of more voice services it’s only natural that we will start to see more ways of trying to hack them. Pindrop puts an interesting focus on the aural details of an experience as a way of helping to fight that. It’s detail that we often overlook in today’s very visual culture, but it’s also in a way a return to more analogue days.
Balasubramaniyan said one of his inspirations for the startup was a story he read as a child in 2600, the Hacker publication, that stuck with him, about Bell Labs. There, they had a team of blind engineers who could identify problems on a phone line by listening to the dial tone. “They had golden hearing,” he said.
