Editor’s note: This article is part of a multimedia series called “Tomorrow’s Unicorns: A look inside Raleigh’s $1B startup pipeline,” produced in conjunction with Innovate Raleigh. The series aims to spotlight some of the region’s homegrown startups tipped to hit the $1-billion valuation mark, thus becoming a so-called “unicorn” in the language of investors, in the not-so-distant future.
RALEIGH – Global fraud and identity theft is on the rise. So is the technology that works to protect us and keep business flowing.
Enter Global Data Consortium (GDC).
This little data startup from Raleigh has built a cloud-based global identity verification platform that allows businesses to access “high-quality, local data” mined from over 270-plus sources and data partners. That treasure trove of data, they say, enables businesses to determine a customer’s true identity — in real time, just about anywhere in the world — so transactions can occur.
It’s also putting GDC on track to becoming a $1-billion enterprise, otherwise known in the venture capital world as a “unicorn.”
Since 2016, it’s been growing around 120 percent year over year. They currently cover 70 countries, and are growing across multiple verticals, including fintech, gaming and regtech. Revenue has ballooned from just over $1 million to a projected $20 million or more in 2021.
“What we believed to be the future turned out to be correct,” said its CEO and founder Bill Spruill, speaking from the company’s new headquarters located within the historic Pilot Mill complex in downtown Raleigh. “The idea of walking into a bank with a bunch of papers to verify who you say you are, is a holdover from the past,” he said. “Now people want to do that instantaneously using a mobile app, and that’s what our platform allows.”
The next target: $100 million in annual revenue.
“Somewhere in 2025, we should be able to achieve that,” Spruill said.
The identity verification (IDV) market is expected to grow to be worth $21.9 billion by 2026.
Even before the pandemic hit, companies and industries had already been facing increasing pressure to comply with Know-Your-Customer (KYC) and Anti-Money Laundering (AML) regulatory rules. In 2020 alone, financial institutions got hit with $10.4 billion in global fines and penalties for noncompliance.
But the risk is now even more acute. Since the pandemic began, fraudster threats against businesses have jumped by 46 percent, according to TransUnion’s latest report.
The threat has increased. But so have the opportunities for IDV and solutions like GDC’s. Where fintech and gaming companies had already competed to provide a fast and frictionless way to do things like open an account, apply for credit, or a loan, the pandemic spurred an increase for IDV by reducing all face-to-face interactions to zero.
“It’s gone from accelerating to just ludicrous speed,” Gaddy said.
It’s that kind of growth that attracted investors to pour roughly $3.5 million into the startup last July. Data provider Refinitiv and Village Capital are among its investors. It’s also attracted high-profile customers and partnerships like LexisNexis, Experian, Refinitiv/LSEG, and Remitly. “We’re the sugar in a lot of people’s chocolate,” Gaddy likes to say.
Ralph Rodriguez, Executive-in-Residence at Boston-based Summit Partners, said the IDV market has many different solutions and vendors.
“GDC is already unquestionably a market leader in the data-driven global IDV segment,” he said. “I can’t say they’ll be the biggest player in the space, but with their model of high growth coupled with consistent profits, they’re one of the best-run and most stable companies in this market.”
Spruill and Gaddy are both native North Carolinians. Spruill is from Goldsboro; Gaddy is from Wilmington.
They met back in the early aughts when Gaddy, an NC State grad, and Spruill, were freelancing as independent contractors in the data space around town.
Before the days when co-working spaces like Raleigh Founded and WeWork dotted the landscape, they crossed paths working remotely from their laptops out of the popular Café Helios. Back then, it was based in the Glenwood South entertainment district.
Spruill: “We each had our own hustles, if you will.”
Eventually they found themselves at the same software firm AddressDoctor – Spruill as chief operating officer and Gaddy as head of American partnerships. Once that company got acquired, the pair ventured out on their own.
They founded GDC back in 2011, but success didn’t happen overnight. They went through several iterations before finally landing in the current space.
“Once we embraced digital identity and compliance,” Spruill said, “the business started to take off.”
They bootstrapped the company up until 2020. And investors didn’t exactly come running in at first. As an African American entrepreneur, Spruill has spoken in the past of the many challenges Black founders face while raising funds.
“If two 20-year-old white kids, in the Silicon Valley, perhaps graduating from Stanford or MIT, presented the same idea in the venture community what the outcome would have been? I imagine their business would have been funded in a heartbeat,” he said in a July 15 article published on TechWire.
But there’s an upside: “As a result, I believe we delivered a far better solution,” he said.
Outside of GDC, Spruill is also a prominent figure on the startup scene.
He’s an active angel investor, writes regularly for Medium and also serves on a number of boards, including Innovate Raleigh (the underwriter of this piece) and Triangle Family Services. He’s also outspoken about issues related to diversity and inclusion in the ecosystem. Last year, he led a movement to encourage other firms to move their earnings to M&F Bank, the second oldest minority bank in the country. Fellow CEOs at Adzerk, Pendo and K4Connect all stepped up.
Zebra, not unicorn
Suffice it to say, Gaddy and Spruill’s work quarters are much different to their cafe days. The team relocated to their new digs at Pilot Mill, a textile mill originally built in 1894, earlier this year. It features an open-floor plan with exposed brick, lots of ductwork, and original barn wood doors. Just the kind of place that would attract a young, millennial engineer in this tight market.
They’ve also boosted numbers – now totaling 38 – but they’re adding slowly and deliberately. In addition, they’re exploring other verticals, like helping companies move business online in verticals where in-person onboarding was the norm pre-pandemic.
Spruill: “We don’t hire more people than we can sustain, and we try not to make investments that are too far out over our skis.”
As it so happens, they’re based in the same space once shared by Prometheus Group, another homegrown startup that achieved $1-billion valuation in 2019.
When that comes up, Gaddy and Spruill laugh. Sure, they wouldn’t mind following the same trajectory. Just don’t say the U-word.
“We don’t want to be called a unicorn,” Spruill said. “We’ve focused on building a sustainable, reality-based company.”
Gaddy clarified: “We would love to be valued as a $1-billion company, which is, I know, one of the definitions of unicorn. But it’s also a definition of a zebra. It’s how you get there that we think is important.”
Zebra companies are companies characterized by doing real business, not aiming to disrupt current markets, according to Entrepreneur.
Regardless of monikers, one thing is certain: For GDC, Raleigh is home.
“We both grew up here. Never in our wildest dreams would we see our company being based somewhere else,” Spruill said. “It’s better to have a dazzle of zebras, then one or two unicorns.”
NOTE: A LinkedIn Live chat with the founders is rescheduled to Thursday, September 28 at 12pm. Check WRAL TechWire’s LinkedIn page for further updates.
This editorial package was produced with funding support from Innovate Raleigh and other partners. WRAL TechWire retains full editorial control of all content.