Bulgarian digital identity and trust services provider Evrotrust recently secured €3.3 million in investment, aimed at bolstering the company’s expansion efforts into new European markets. The investment is also expected to facilitate the incorporation of new segments, particularly small and medium-sized businesses.
Founded by financial specialist Konstantin Bezuhanov and e-government expert George Dimitrov in 2018, Evrotrust initially focused on delivering qualified trust solutions to assist businesses and government institutions in digitizing their services.
Their offerings include remote identity verification and secure qualified electronic signatures, with the platform designed to streamline the process of remote customer identification, onboarding, and service provision for organizations. Together with Mastercard, the company also worked on an eID (electronic identity) project in North Macedonia.
Today, Evrotrust boasts a user base of over 1.3 million individuals across 58 countries, with 150 enterprises in 11 countries utilizing their services.
In an interview with IT Logs, Evrotrust’s CEO Konstantin Bezuhanov discusses their latest investments, the project in North Macedonia, plans for the future, as well as what is next for digital identity solutions at a time when there are increasing cyber threats that specifically target this segment of the industry.
IT Logs: Walk us through your latest investment round?
Konstantin Bezuhanov: We closed our latest fundraising round just a few weeks ago with €3.3 million. What is interesting about the round is that it comprised both of a private equity investor and funds that have been raised from clients. So a fun fact is that all the three times where the company has injected external capital, we have managed to do so by actually tapping into our network first and utilizing clients as people who have tried the solution, have seen the the added value of it, and actually are liking it so much that they wish to do investment within the technology in order to gather equity. So we’ve done that – that’s the third time that this has happened. But in essence, it’s a great signal, because it really shows confidence, as it validates our strategic direction for potential sale.
Now if we zoom out a bit away from Evrotrust and look at the whole market as a whole, we are actually managed to close the current round in a record amount of time – I think it took us about 14 days from start to finish, at a time when the European VC investments have been at a three-year low and there’s been about 45% lower deal value compared to the previous year, which has been declining from the previous year as well. So when that activity has been at a very low state, we managed to close this very fast funding round. And the reason why this has happened in my opinion is that the investors also see what we’re seeing from the kitchen and this is that the market is at a pivotal point at the moment. So the whole identity market is at the point where new regulations are going to be adopted, especially the eIDAS 2.0 regulation, which is expected to be in effect within the first quarter of this year. And this is going to accelerate a global expansion of digital identity, which is going to generate new market opportunities.
We are uniquely positioned at the moment in order to benefit from this and we’ve been preparing ourselves for the last few years for these changes. Part of the funds are going to be allocated around our global expansion. So making sure that more and more citizens and more and more enterprises around the world can benefit from our technologies and from the services that we provide.
But also part of the solution is going to be for the investment of the new concept which we call the “digital identity wallet”. Now the digital identity wallet is going to be the place where citizens will be able to store personal data, ID cards, driver’s license, healthcare records, educational certificates, and will be able to use that information online and offline.
Are digital identity wallets the future when it comes to electronic IDs?
Such identity wallets are likely going to appear around Europe. Most of them are driven by governments who will be looking to adopt and give out the basic functionalities for the citizens of their country. What we’re looking at is a more end-to-end approach for the citizens. So we’re looking at different ways how we can add value for them and for the people who are going to be receiving the information on the wallets.
We are already in good talks with various governments around Europe in order to help them out within the process of adopting digital identity wallets. Of course, we’re uniquely positioned here in order to help out based on the team’s long-term expertise, and based on our great experience around the product markets in order to see what the actual end users are looking for. Also, there is our ability to be on the pulse of the regulations which are coming so we’re a really strong partner for many governments, including the North Macedonia’s government in order to help them draft out the best roadmap for them to adopt those new initiatives and for its citizens to benefit from it.
What are the potential markets that would be best suited for such initiatives?
What we are seeing and what our team is strongly convinced around is that the problems that we’re solving at the moment are bigger than the tech bubble. So they’re larger than the tech space. So in essence, our vision is to make these digital identity and trust services, kind of the cornerstone of the economic and social activities of people around the world. So we’re not talking about just a specific economic class within a specific sector. We’re talking about people around the world.
Now, of course, as I said, there’s significant growth potential given the evolving regulation within digitalization, but in essence, we’re looking to provide a solution that is going to be the right for every citizen across the world. And it’s gonna allow them to participate within an economy to access basic services like financial services, education services, utility services, or health care.
With the evolving economy that is going largely digital, if we can’t solve the problem of identity, people are going to be left behind and that’s their basic right to have access to those services for us. It’s a very important factor that drives our team.
Since 2018 when Evrotrust was founded, how has your journey been so far?
It’s been a great journey. Probably one of the great things that we have managed to do is to gather a very motivated team of experts and executives around the company, who are driven by the mission of the company. So that’s been one of the key things around it. In terms of ego matrix, we have managed to achieve great milestones as well. So we have already expanded our user base to insert over 1.3 million unique users from 58 different countries.
We’re partnering with over 150 enterprises, including leading banking institutions, from two continents and a whole bunch of other enterprises from 11 different countries. We have secured various investments from the professional landscape, which has been great. And most recently actually, one of the bigger milestones that happened in the second half of last year was that Evrotrust was recognised as a notified eID scheme by the European Commission, which again, certifies for the validity and for the depth of the technology and the solution that we’re offering to our clients.
Can you take us a bit regarding the North Macedonia project?
We started the North Macedonia project in partnership with Mastercard global. We sat down with the experts of the digital identity team in Mastercard, and we were reviewing basically, what is the best place in Europe, for us to prove our thesis around digital identity. So at that point, it was very well understood by everyone that digital identity is going to have a massive market opportunity around the EU. What was questioned was whether this was bigger than the EU.
So, we basically sat down, and we said we wanted to find the right market, which is going to do two things – we had two main objectives of the project. One of them was that we wanted to reject the hypothesis that digital identity is an EU-only phenomenon. We wanted to show that there’s demand for this outside of the EU when the regulations are different. And there’s opportunity outside of the EU. The second thing is that we wanted to enable a brand-new privacy driven mechanism within the core genome to protect the personal data of the users.
So we said what is the best place for us to do this? Based on our research based on looking around, we decided on North Macedonia as the perfect place – it had a very agile and open receptive government. It had a great ecosystem of financial services who are interested in piloting this and it was fairly close to what we already have as a proven track record, so that we can quickly get and meet our objectives.
Now since we started back then we’ve made substantial progress. Currently, we have a number of corporate clients, including three large banks that are using the solution. And as of this month, actually, our team is working with the Minister of Information Society and Administration to integrate electronic identification and remote signatures to the national e-Government portal. So the idea is to be able to enable the government in order for citizens who want to use any kind of government services to do this remotely and easily. We have this enhanced expertise in managing complex legal and technological digital identity initiatives and have managed to do and work with various stakeholders in order to provide the services to the citizens.
Do you think that citizens of the whole region will soon benefit from emerging digital identity trends?
I am very, very certain that it’s not going to be just in the region, but it’s going to be all across Europe. So it’s one of those silent evolutions that are happening, that people are not realizing. And this is because it’s driven by non-traditional factors, it’s driven by regulation, and that regulation it’s usually not something that really cuts the headlines of the news.
And hence, forward, this change, it’s not well covered, not that well understood, outside of the experts. Very soon however, I am certain that we’ll find similar things and the whole mission of what is happening and why the regulators are also pushing around this is to get rid of the plastic. Not as an environmental only impact, but to get rid of this single non-portable plastic document that contains a single version of you with just some basic credentials.
So the whole idea here is how do we transition this to be able to support us into the new evolutions in the new work? So in essence, the citizens and market participants can be part of these new marketplaces with trust in them so that they can use them. So that’s kind of the whole idea around it.
What are the biggest risks when it comes to implementing such solutions?
I’m seeing this more as an opportunity, and I’ll explain my point here. So we’re seeing that the challenges are pretty much uniform. We’re seeing that the demand and the supply dynamics across different geographies are fairly consistent. And our enterprise clients consume very much the same predictable pattern. Now what has been happening recently, as you mentioned, is that there is the rise of the AGI, the general generative artificial intelligence, and we’ve seen that in a very short amount of time. There have been amazing tools which can really erode the trust within the digital space.
And as I said earlier on if you recall, our mission is to create trust in the digital space. So we’re seeing that those developments in AI they’re very interesting. They’re very exciting, but they can also be very frightening if they’re used by malicious actors within the economy. Deep fakes, voice cloners and, and other technologies are currently deployed in order to kind of try for fraud in the digital space. These are definitely barriers and these are concerns that our clients also have.
Luckily, by tackling the whole identity problem from a regulatory point of view, and as I said by becoming an notified eID scheme, this has been a subject for a very long process of auditing by the experts in the European Commission, whose job was to make sure that the technology is secure enough so that it cannot mislead within the regulated businesses. For instance, when we talk about financial services, it would be a great problem if there was a technology, which was accepted by law, but could be used by malicious actors in order to fund illegal activities, or to misrepresent the people who they are.
So the barrier to entry here is to get all the actors within that ecosystem to be able to trust it. One great way of doing this is to use traditional methods, like governments, like the European Commission that currently is issuing the alternatives which are the physical documents which are already trusted by the economy. So there’s a lot of developments and deep fakes are a challenge to that trust, but they’re also a great opportunity.
Because in our opinion, we’ve already seen the first cases of fraud based on AI, so once we’re seeing this AI fraud ramping up actors, both enterprises and systems will be looking at the secure and recognised methods in order to protect the identity but also be able to participate online. So, methods like “send us your ID card picture” of “your ID card over email or messaging” are just not going to work.
