After years of development, KC startup EyeVerify looks like a success [The Kansas City Star :: ]
(Kansas City Star (MO) Via Acquire Media NewsEdge) March 11--Here is the secret sauce to become what is arguably the hottest business startup in the Kansas City area:
Start with a smart inventor who designs a product no one else has claimed rights to. Stir in a community with plenty of entrepreneurial connections and a university, in this case the University of Missouri-Kansas City, that is striving to transfer academic creations to the marketplace. Top off with an experienced entrepreneur who has money and communication skills.
Voila: EyeVerify, a company that aims to do away with pesky smartphone passwords. Well, not exactly voila.
It has taken 10 years for a concept hatched by Reza Derakhshani, now an associate professor of computer science and engineering at UMKC, to be developed into a viable commercial product sold by a company headed by entrepreneur Toby Rush.
In the last few months, EyeVerify has pulled down awards for innovation and marketability of its password-replacement invention for smartphone cameras.
As users transact more personal business through their smartphones, the potential soars for identity theft or accidental loss. Something is needed to ensure that you alone are accessing your bank account or whatever else you do via your smartphone.
EyeVerify's biometric system takes a picture of blood vessels in the whites of your eye to verify your identity. It is competing in a rapidly expanding field of biometric identification to allow you to log into your phone without PINs or passwords.
The company says an eyeball scan is faster and more accurate than a fingerprint or an iris scan and is far less hackable than a password.
"We knew we had something really cool and marketable with Reza," said James Brazeal, the director of technology commercialization, licensing and marketing at UMKC. "It was a matter of finding the right person, Toby, to have the funds and vision to get through the valley of death."
The valley of death -- the time after an inventor's concept is proven to work -- is the time it takes to find a company to license the product, spend development money and assume the risk if and until it is marketable.
"Toby was willing to fund the transition from university to commercial product," Brazeal said. "That's a really difficult thing."
The company recently scored its first commercial sale, to AirWatch, an Atlanta-based mobile device management and software security company. A likely first use is as a security replacement platform for a client, possibly a bank.
A new report by Global Industry Analysts on the use of biometrics in banking and financial services -- to protect transactions from fraud and security breaches -- said the U.S. market for such products is expected to exceed $8 billion by 2020.
Big win a boost
EyeVerify, located in the Kansas City, Kan., "StartUp Village" at 45th Street and State Line Road, vaulted to international acclaim last fall, when Rush won a Dutch entrepreneurial competition. One of the judges, Riku Asikainen, co-founder of the Finnish Business Angels Network, said EyeVerify stood out for "work well executed."
The win gave the company credibility and visibility to investors. So far, Rush has managed two rounds of funding that raised about $4 million, with more prospects at hand.
"Toby has been brilliant in leveraging the community's entrepreneurial resources," said Thom Ruhe, a vice president of entrepreneurship at the Ewing Marion Kauffman Foundation. "He's a great example of fixing a problem that much of the rest of the country is struggling with. ... Billions of dollars of intellectual capital (is) stranded in university systems."
Rush's first entrepreneurial effort was to co-found Rush Tracking Systems in 2003, which developed a radio frequency identification system to track forklift movement in manufacturing and warehousing. He sold that company in 2009 to private equity investors and was ready for something else.
Two years later, Rush met Reza Derakhshani through a "friend-of-a-friend-of-a-friend" introduction.
"No one else was doing the whites of the eyes for identity verification," Rush said. "We struck a royalty fee based on the expectation of future revenue."
EyeVerify principals won't talk details, but such arrangements generally give the inventors and their universities a small share -- 3 percent to 8 percent -- of future revenue.
Derakhshani makes sure that a former West Virginia colleague, Arun Ross, now at Michigan State University, gets credit as a co-inventor. He also credits the product's development to his UMKC research team, Rohit Krishna, Vikas Gottemukkula, Sashi Kanth Saripalle, and Pavan Tankasala.
According to Derakhshani and others, it took only minutes after Rush met the academic team for him to suggest that instead of the now-clunky camera system he was first shown, EyeVerify be developed as a technology for smartphone cameras.
"We've now gone three generations beyond what they had to change the core concept and make it commercial," Rush said. "It's taken two years to get to that point. ... We're now in a perfect storm of biometrics and authentication focused on mobile. There are over one billion smartphones out there, and anything with a one megapixel camera will work with our product."
People who know Derakhshani call him "crazy smart" and "very engaging."
"The technology doesn't always matter as much as the people involved," said UMKC's Brazeal, who was the main liaison between the engineering lab and the entrepreneur. "With Reza, we had a fantastic person to work with. He's very aware of the commercial markets, which you don't always find in researchers."
In his tiny office on the fifth floor of UMKC's Flarsheim Hall, Derakhshani easily flows from scientific descriptions of his biometric sensor work -- on conjunctival episcleral vasculature -- to everyday words -- blood-vessel patterns in the whites of eyes.
His first biometric invention at West Virginia solved a problem to help differentiate between a live fingerprint and a "dead" one, such as a fingerprint lifted from a drinking glass. After he was hired by UMKC in 2004, Derakhshani was eager to "find a new biometric modality," which led to "the only part of a body with exposed vasculature."
He realized that "even a regular camera can read that vasculature" and "even if you poke one side of one eye, you still have three other sides that are probably OK to read, and we can make a match with just one side of one eye." And he figured out how you can't fool EyeVerify with a photo of an eye instead of the real eye.
"I couldn't believe no one had applied for this before," Derakhshani said of the patent granted in 2008. "We proved we were the first to conceive the EyePrint. No one else was reading the whites of eyes for identification."
Another key concept, Derakhshani said, is that the image of the eye isn't stored. It's translated into a "template," an algorithm, described as a "revocable digital key."
"That's our magic sauce," he said, calling himself a privacy fanatic. "Nothing is on the servers. Your biology is yours. We're only storing a mathematical equation that vanishes in an instant."
University happy, too
When Rush won the global honors for EyeVerify in November "so many got to celebrate with him," said Maria Meyers, the director of the UMKC Innovation Center.
"So many university and local investors and people in the entrepreneurial community have supported him, and he's taken advantage of so many resources, it really personifies this community's desire to help our entrepreneurs."
Meyers tallied the network, including KC Sourcelink, the Whiteboard to Boardroom program, Digital Sandbox KC, the Kauffman Foundation, StartUp Village, and the hoopla surrounding Google Fiber installation, the UMKC small business technology development center and Pipeline. And UMKC, she said, is running hard to raise local awareness of the invention and research power of its faculty.
"With Reza and Toby we found the knowledge and the resources," Meyer said. "Reza had a well-protected, novel technology that no one else was using. It'd be a quick proof of concept, and Toby Rush showed up to take it forward."
To reach Diane Stafford, call 816-234-4359 or send email to email@example.com.
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