Our Investment in Basis Theory
If you are reading this right now, you have seen “HTTPS” show up on many websites. In fact, you may even notice that sometimes it says HTTP, and other times it says HTTPS. You know a website is more secure if it is HTTPS, but perhaps couldn’t explain why.
The Hypertext Transfer Protocol (HTTP) was the original way to communicate information on the web. It is the standard protocol that powers the Web. When it started gaining consumer traction, led by the introduction of the browser a few years after its creation, Netscape realized a problem: it wasn’t secure. Anyone could listen to requests and responses of web traffic, and steal relevant data. This made online shopping with a credit card dangerous. The developers at Netscape launched a tool called “Secure Socket Layer (SSL)” which allowed web developers to transmit data with a secure connection, using encryption, accessible via keys. Originally a fintech commerce solution, it became a method that now powers all secure communication between web servers and web browsers.
Two important lessons from that history. The first: anything worth stealing can be, so a tool that makes transmitting — and storing — that data secure, is valuable to companies. The second: credit cards and financial data is what tends to get secured first. And yet, today, untold millions bank accounts, and social security numbers are sitting in Excel and CSV files on company servers across the world, while credit cards are locked within payment processor walls, inaccessible to merchants and businesses. Enter Basis Theory.
Tokenization is, simply, the process of replacing sensitive data with non-sensitive data. It allows you to create keys that you can share with vendors, customers, partners, and that give you access to token vaults for the sensitive data. The payment card industry knows this method well; it is how credit card numbers are secured today, and how companies that interact with that data stay compliant. It is how that data is stored at rest.
The Basis Theory team, hailing from some of the most important new financial technology companies in the world, saw this opportunity to use modern cloud software to create flexible, lightweight, easy-to-use APIs for developers to create token vaults for *any* data type, in any instance, and integrate it with their services. In less than a year, they built a compliant, beautiful, fast product that creates token vaults and interactive API’s for those token vaults, reminding me of those SSL developers in 1995. I always come back to this thought, which has been following me around for a half decade.
https://twitter.com/km/status/1230717130871410688
Secure data at rest is an e-commerce merchant and payment processor solution today, but the problem — and the opportunity — is everybody’s. As more and more of our lives move online, more of our secure information is stored on servers, and as consumers learn to value the power of encryption more, platforms like the one developed at Basis Theory will become both ubiquitous, and essential.
We were so pleased to be able to lead their seed round, and we continue to believe that what starts as fintech today, may end up as everybody tech tomorrow.
Oh, and they are hiring :)
