Mobile authentication outfit Encap has announced a seven-figure investment from ProVenture Seed. It joins earlier investor Alliance Ventures in backing the Norwegian start up as it looks to bring its banking-grade, software-based authentication platform to a wider market.

Encap’s solution is pitched as an alternative to the one-time password based authentication commonplace in the financial services market. Rather than receiving a unique code (OTP) via SMS or a keyfob (and then having to copy the code over to the application or browser), it recognises the user's smartphone or tablet, and prompts them to enter a PIN. This method can be used not just to authenticate mobile and online services but also in-store purchases. The likes of Santander Consumer Bank Norway, EnterCard and Sparebanken Vest are onboard with the venture and partners include Evry, Fujitsu and Signicat. The new investment capital will allow Encap to expand its client base in existing markets, and secure clients and partnerships in new ones, the USA and UK in particular.

“Encap is a company with the potential to disrupt a market that will be worth more than $5 billion by 2017,” says Herbjørn Skjervold, managing partner, ProVenture Seed. “Multi-factor authentication combined with risk profiling is now seen as the replacement for passwords, but the exact mechanism to deliver this level of security is still in flux. This presents an enormous opportunity. Encap has all of the advantages of the systems currently being adopted by the big players, but none of the downsides – it is well positioned to take advantage of dissatisfaction from both users and service providers.”

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