Local Fingerprint Scanner Gets Investor and National Security Interest
By Andrew Webb
Journal Staff Writer
An Albuquerque tech company, which recently landed $8.1 million in venture capital investment, aims to corner the market on proving you are who you say you are.
Several new investors, including communications giant Motorola, joined last week's Series-B, or second major, investment round in Lumidigm.
The 4-year-old company plans to use the funds to ramp up development and marketing of software and hardware that augment traditional fingerprint scanning devices by using light to map layers of tiny blood vessels and other structures found beneath the finger's surface.
The investing round included existing investors Draper Fisher Jurvetson (DFJ) New England, California-based International Venture Fund (IVF), Wasatch Venture Fund and Solstice Capital, which led a $5.3 million round in Lumidigm in 2002. New to the table were Wasatch New Mexico Fund, a spinoff of the Salt Lake City firm aimed at investing specifically in New Mexico companies, Fort Washington Capital Partners, which invests in New Mexico companies from a chunk of the state's permanent funds, DFJ New England's Silicon Valley parent firm and Motorola Ventures, an investment arm of the Schaumberg, Ill.-based communications company.
Very eager investors
The funding round was the culmination of several months of discussions with clamoring investors, said Lumidigm CEO and chairman Robert Harbour.
"There was a lot of excitement— security is front-page news," he said. "We had a number of groups interested in investing in us that didn't make the round because we had to close."
Brian Birk, a local representative for Fort Washington, said the interest from out-of-state investors and corporations bodes well for locally developed technology.
"New Mexico has a tremendous amount of intellectual capital in this homeland defense tech space," he said. "Lumidigm is the first of what we hope will be many to leverage that in the commercial market."
The $8.1 million investment is one of the largest such investments made in a New Mexico tech startup since the Internet heyday of 2000. In late 2004, photovoltaic cell developer Advent Solar announced a similar round of $8 million. Both reflect a renewed nationwide venture capital industry, and never-before-seen investment activity in New Mexico, which has already seen more than $20 million in venture capital investments this year.
"All of a sudden, we have corporations calling us, rather than us knocking on their doors," said Matthew Ennis, director of business development for Lumidigm.
Gov. Bill Richardson, in a statement, praised the company for its success in attracting investors.
"This homegrown New Mexico company is exactly the type of technology commercialization we need to create high-wage jobs and move (the state) forward," he said.
An Inlight spinoff
Lumidigm is a spinoff of Albuquerque-based Inlight Solutions, which is developing noninvasive glucose monitoring equipment that also uses light. Inlight discovered in its research that light passes through every person's skin differently; it spun off Lumidigm in 2001 to further the concept by developing a device that shoots light through a finger, measures it as it comes back out, and senses unique properties.
Since childhood, we are taught that no two human fingerprints are exactly the same— that's why they remain the simplest way to identify and record transactions between anyone from criminals to bank customers.
But government agencies and corporations seeking to perfect fingerprint identification in an increasingly security-conscious world have found that fingerprints are easy to mimic and, in some cases, hard to get.
Fingerprint detail
Unlike traditional fingerprint scanners, which bounce light off the ridges and troughs of the fingerprint to get a digital rendering, Lumidigm's LightPrint technology uses several different colors of light, each of which reacts differently to structures under the skin's surface.
So, for instance, it also shows the pattern created by tiny blood vessels, which actually follow the same unique pattern of the surface print, allowing the software to create a virtual reconstruction of the fingertip. That prevents fooling the scanner with a prosthetic finger and eliminates false results caused by dry, wet or oily skin, worn fingertips and other factors.
"Our device ensures it's a real finger, and ensures you get a good-quality image," said Robert Rowe, Lumidigm's chief technology officer.
Uses for the technology include limiting entry to commercial and government buildings, beefing up border security, verifying credit or ATM card ownership and locking such devices as computers, phones and guns so that only those with authority can use them, Ennis said.
"Undoubtedly, this is the right technology at the right time to meet some pretty extraordinary demands," said Richard Harding, an IVF partner who lives in Santa Fe.
One company, Florida-based Cross Match, has already partnered with Lumidigm to integrate LightPrint with its line of standard optical fingerprint scanners, which it sells to federal agencies.
Government interest
One of Cross Match's customers is the Department of Homeland Security, which uses such equipment for its US-Visit screening program. US-Visit was launched in 2004 at 115 airports, 15 seaports and 50 busy land crossings on the country's Canadian and Mexican borders. Currently, the system requires fingerprint and photo scanning for every visitor, and the agency is considering radio transmitters in future phases.
DHS has acknowledged the difficulty of obtaining quality fingerprint scans in published documents and congressional testimony.
Motorola has a subsidiary company it bought in 2000, Printrak, which also makes fingerprint scanning hardware and software used by government agencies and the criminal justice system.
Though Motorola Ventures is measured on its investment performance, Harbour said, it does seek to strategically invest in companies that could augment its products, which range from mobile phones to computer networks.
Research funding
Beside investors, the company has received research funding from security-minded government agencies such as the CIA and the Nuclear Security Administration, and has partnered with other agencies and companies to develop similar technology.
The company, which currently employs 12, is expected to double in size in the next nine months as it aggressively seeks optics and software engineers. Harbour said it could likely employ 30 by the end of next year.
"We've got more opportunity now than our team can fulfill at this point," Harbour said.
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