Euro am Sonntag interview: Nect founder Jürgens: “Going to NASDAQ would be an obvious choice” | message
by Ralf Witzler, Euro am Sonntag
S.Identifying myself as a legally competent person on the Internet is usually a time-consuming process. Anyone who wants to open an account, view medical bills for their health insurance or apply for unemployment benefits knows that. The Hamburg start-up Nect has set out to minimize the effort for users with its remote identification app and to reduce drop-out rates. In the insurance industry, Nect won its first major customer in 2018. In the meantime, Telekom and the Federal Employment Agency are also using the procedure to facilitate online access to their services and to prevent abuse.
In conversation, the cautious Hamburg-based Benny Bennet Jürgens becomes almost enthusiastic when it comes to the development of his company and the challenge of a possible future IPO for a technology company in Germany.
€ uro on Sunday: How did you get started with a company specializing in remote identification?
Benny Juergens: I am a software developer and have been responsible for app development for an insurance company for several years. In this industry, the regulation requires a personal identification of the user for certain processes. But we had to keep observing that registration processes were aborted.
At that time, an activation letter was first sent by post from the insurer to the user for identification. That meant a blatant media break and the letter took days to reach the customer and the customer could finally use the app. Back in 2016, we saw the need for a fast, secure and regulatory solution and wanted to seize the opportunity to develop it.
What happened next?
We first went to an InsureTec accelerator, a development center for young companies in the insurance industry, in Munich to validate the idea. We then went very specifically in the direction of insurance in order to place our solution there. Today we address a wide range of industries, including healthcare, finance, and telecommunications.
What are the challenges for an identification app?
One of the most important questions is about the waiting time before I can use the function. Users are brutally annoyed when they sit at their desks, want to do something with the app and have to wait a long time. Another question is about the effort. With the Post-Ident procedure, the waiting time is not serious, but you have to go to a post office, or you could go to the insurance company and identify yourself there, but shy away from the effort.
What follows from this?
The optical control remains. It represents the least hurdle for users. The ID document is checked optically and not electronically by reading a chip. If I visually check the document, as the bank employee would do on site, for example, this offers the possibility of reading out almost all identification documents in the world and avoids the restriction to documents with a chip, such as with the eID in Germany. With good user guidance, any device with a camera is sufficient, be it a smartphone, tablet or computer. And if I control the camera not by humans, but automatically, for example by using artificial intelligence (AI), there is no waiting time.
Is the regulator satisfied with it?
We always have to compare ourselves with the on-site inspection. In a way, this is the gold standard of ID control. From our point of view, the machine is now safer than being checked by a person whose attention can be distracted or who is no longer as fit at lunchtime as it was in the morning. At this point we had to do a lot of convincing for our technology. We had to show that we are safe and offer high quality. We succeeded.
How do you want to defend your product against imitators?
When using AI, the amount of data that you have and already had in order to train the models plays an important role in terms of quality and reliability. Experience with a wide variety of users and devices is also important. No user behaves like the other, the videos to be controlled vary in quality, depending on the device, lighting conditions and so on. A person is good at dealing with these differences. AI is far from being able to do that to this extent. The machine compensates for this with an extreme amount of processed data. Simply recreating our app doesn’t work, you have to have access to a similar amount of data. And when it comes to data, how do you get thousands of ID card images?
Isn’t that damning you to growth at any cost?
Our business is based on trust, we offer so-called trust services. In the beginning we didn’t have that trust. That came with the first customers. We had our first assignment with R + V Versicherung. We now have numerous health insurance companies and the Federal Employment Agency as customers. Telekom was our first customer in the telecommunications industry. We are currently expanding into other industries. Banks come in the next step – a huge market.
What market potential do you see for your identification application?
I think we managed to make the market a lot bigger. Traditionally, identity verification was only an issue in the banking and insurance sector. Because we have created a good mix of user-friendliness and cost efficiency, we are eligible for areas that do not necessarily have a regulatory, but a protective interest. Think of social networks, dating profiles, classified ads. We’ll double the market, maybe even triple it. Before that, analysts assumed a market of 16.5 billion euros.
How do you finance your growth?
We are already working profitably. That is why we can grow a little on our own. For the planned internationalization, however, another round of financing may be due this year. We want to attack in several countries at once, which is very capital-intensive. But we want to put an exclamation mark.
Which countries do you think of when it comes to internationalization?
Regarding identity and signatures, the same regulation applies throughout the European Union. This means that the entire EU area is basically open to us. We are also present on the German market, which is considered to be highly regulated – you could say that you can do it here, you can do it anywhere. With our base in Germany, we can grow beyond the EU, even to other continents.
Is an IPO conceivable for you?
First of all, as I said, we are still planning a classic financing round. Looking ahead, however, I find an IPO extremely attractive. I am passionate about going public. I will keep an eye on that.
Where would you go public?
I am very much driven to do things that are not so obviously on the way. For a technology company like Nect, it would make sense to go public on NASDAQ in the USA. The liquidity that is available for technology companies there is simply significantly greater than in this country. And the understanding of the topic and the technology behind it is also better. But daring to go public on a German stock exchange would appeal to me personally – it would be a challenge. In the end, it will decide what is best for Nect.
Where are we headed in terms of product development?
As the latest product, we have developed the Nect-ID, something like a digital identification document on the smartphone. Once legitimized with the Nect Selfie Ident app, users can use their smartphones to identify themselves to other companies that use our solution – without having to go through the entire identification process again. This speeds up the remote identification process even further. For us as a company, this means additional protection from competitors because we can create network effects. The more companies recognize our digital ID, the more likely users are to be able to identify themselves via us, which in turn helps more companies recognize the Nect ID.
Born in Hamburg, Benny Bennet Jürgens began his career as a computer scientist in the insurance industry. The 34-year-old mainly worked there on digitization projects. Before founding Nect GmbH with his partner Carlo Ulbrich in 2017, Jürgens was responsible for app development for a global insurance group.
Identification by video
In Germany, regulators require online identification via video. This allows the control of optically variable security features on ID cards and the differentiation of real, living persons, for example from masks, which is not possible with photo identification procedures. This is why the Hamburg start-up Nect, with its 65+ employees, only uses moving image technology.
Image sources: Matthias Friel / Nect