Maverick entrepreneur and former journalist Steven Brill knew he had a golden idea to make airport security lines less of a hassle in a post-9/11 world. Three years and $116 million in venture financing later, he has airport “fast pass” company Clear on the fast track to success.
A cursory glance at Spark Capital's investment portfolio reveals a list of companies that seem very much in line with the Boston-based firm's selfdescribed focus on the intersection of media and technology.
Spark, which last summer closed its second fund on $360 million, counts internet television broadcasting company Veoh and online game developer i'minlikewithyou among a bevy of companies which the firm hopes will eventually blossom into new media titans.
But scroll down to the bottom of the webpage which catalogues Spark's portfolio, and you will find one enterprise which seems to deviate from the typical destinations for the firm's capital.
In August, Spark helped lead a $44.4 million financing round in airport “fast pass” company Verified Identity Pass, recently rebranded as Clear.
The Florida-based company offers a private, voluntary, biometric “fast pass” system whereby members, after a pre-screening involving fingerprints and iris imaging, are allowed access to faster security lanes at airports and other venues around the US.
So what is Clear – which claims it can reduce the time spent in airport security lines by 30 percent – doing in Spark's otherwise media-rich portfolio?
First off, as Spark general partner Dennis Miller points out, the firm was investing in a company that had already proved itself beyond the risk-filled start-up stage, operating in 18 airports and eager to expand into more.
But the firm, along with fellow first-time investor Syncom Venture Partners, was also betting heavily on the impressive track record of Clear founder Steven Brill, whose past entrepreneurial successes have included magazine American Lawyer and cable television network Court TV.
“In Steve, we had a guy who has taken on an unbelievably daunting task and already made this kind of progress and that gave us a lot more comfort,” says Miller, a former vice president of programming at Turner Network Television who added that he began admiring Brill's work from afar during the early 1990s.
Spark is not the only investor to back its faith in Brill with a hefty chunk of capital. To date, the New York-headquartered firm has secured $116 million from a diverse array of investors including Maryland-based Syncom Venture Partners, defence contractor Lockheed Martin, security products producer GE Security, now-bankrupt investment bank Lehman Brothers and New York-based private equity firm Baker Capital.
Despite the fact that Clear constitutes his first major foray into a non-media related business, Brill says he was able to gain the early confidence of potential investors by highlighting the many similarities between Clear and his past business successes.
“What's often relevant to people that you're pitching is if you've had some other crazy ideas that have actually worked out, people tend to listen to you,” says Brill, who got the idea for Clear while he was writing a book on post-11 September US culture.
Although he did not possess as thorough an understanding of the biometric technology behind Clear as others, Brill effectively touted his experience with Court TV in which he repeatedly battled in courtrooms, legislatures and bureaucratic halls to get permission to film criminal court proceedings.
Brill knew that launching Clear would continually require a well-maintained relationship with the Transportation Security Administration and the Department of Homeland Security, something for which he was uniquely qualified.
Clear is also a subscription-based service, a business model Brill had become intimately familiar with both at American Lawyer and at cable-based Court TV. Last year, Clear retained roughly 90 percent of its 200,000 subscribers.
The company is reserving its fresh capital infusion for a full-fledged national expansion, both into more airports but also into sports arenas and political conventions.