A pivot that feels like a whole new startup
A pivot that feels like a whole new startup
Time for a fresh look at YEO Messaging
Hello there,
PreSeed Now is all about new or very early-stage startups. I mean, last week we featured a startup that had only just started spinning out from a university. But I think it’s worth flexing that rule a little sometimes.
It can take a while to find product-market fit, but startups can often die before that point. Today we’re looking at a startup that was founded in 2017, has previously generated media attention and some investment, but has only found what looks like the right direction.
You might well have come across the name YEO Messaging before when it launched its secure messaging app. But now armed with patents granted on its key differentiator, and having transformed its offering substantially, this startup looks ready to push forward in a big way.
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– Martin
👀 You saw them here first
Congratulations to two startups recently featured in PreSeed Now who have announced funding rounds:
Voice cloning startup ElevenLabs last week announced a $2m pre-seed round led by Credo Ventures. Also, their public beta test yesterday made headlines that might scare some startups but they seem to have reacted well. We covered them in this newsletter in October.
PHINXT Robotics has today announced a £608,000 pre-seed round led by Fuel Ventures. We covered their tech designed to bring robots to small and medium-sized warehouses in November.
Armed with patents and a B2B play, YEO Messaging has found its true identity
Impersonation fraud is a blight on today’s business world. A convincing message, seemingly from the CEO, has been enough to convince suitably busy finance managers to send money to criminals.
Combating this kind of crime is just one of the many use cases YEO Messaging is targeting as it directs its patented USP of authenticated identity towards the business market.
If the name YEO Messaging sounds familiar, it’s because the startup has raised money and attracted media attention in the past.
But while its privacy and identity-focused messaging app previously targeted consumers, it’s is about to make a big play for businesses with a revamped product. And you know what? It might just work.
Consumers *say* a lot of things…
YEO (standing for ‘Your Eyes Only’) sets itself apart from encrypted messaging rivals like WhatsApp and Signal with a continuous facial recognition feature the startup has successfully patented in the UK and USA1. It also allows users to control where a message is read with a geofence feature. And yes, there’s end-to-end encryption too.
But the startup’s initial approach fell afoul of consumers’ reluctance to pay for anything they can get a close approximation of for free elsewhere. While consumers will happily tell researchers that they will pay for their privacy, actually getting them to do so is a different matter.
“As soon as they saw that paywall screen, we saw a massive drop. We had comments like ‘I can't believe you're making this paid when WhatsApp is free’,” explains co-founder and CMO Sarah Norford-Jones.
But while taking part in the CyLon cybersecurity accelerator in 2019, YEO realised the appeal of its app to businesses in fields like insurance where there is a strong motivation to invest in fraud prevention.
The business of authentication
Now YEO is preparing to launch its B2B tech pivot. The startup will soon release APIs that allow YEO to be integrated into other software from companies like Salesforce and Microsoft, as well as specialist software built for specific sectors.
In addition to letting third-party developers build these integrations, YEO will offer some itself. It’s going to start with a plugin for Slack.
But the opportunities of an API-based approach stretch far beyond the popular business messaging platforms, says co-founder and CEO Alan EJ Jones:
“For instance, healthcare has a lot of patient care and management applications, so it will plug in with those applications. And in doing so, it would allow them to be able to send highly confidential documentation directly to the patient or the consumer, and be assured that only they can view it, and meet all GDPR compliance requirements.
“Control is everything when it comes to content, so we repatriate control.”
Seizing the opportunity
Jones’ journey with secure messaging goes all the way back to 2009, when he came up with an idea for time-limited, disappearing messages and media, with an eye on his children’s online safety. Busy with another enterprise at the time, he did nothing about it; Snapchat came along and seized that opportunity.
His second opportunity in the space arrived in 2017.
“I was visiting a university, looking at technology. One of the demonstrations was using continuous facial recognition on a mobile phone… I realised that we had enough power on a smartphone in order to monitor the viewer of content at all times, sampling every several milliseconds.”
Jones says there has been a lot of interest in YEO’s new approach. He says there are letters of intent from the healthcare sector, while in insurance the startup has developed proofs-of-concept to demonstrate how the tech can improve claims management.
“You are able to secure the information around the claim to a level that they're not able to do today, and you're able to short-circuit the time it takes to report a claim. On a cyber claim it saves around £120,000 per claim. A particular insurance company had over 1,700 claims last year, so significant savings from that point of view.”
Regulatory compliance pending, YEO wants to get into the fintech space too. And an opportunity has arisen to white-label the YEO Messaging app for a child safety use case. Authenticating who is speaking to children clearly has benefits when it comes to avoiding fraudsters, groomers, and other unsavoury types.
Also, Jones says a digital content portal that sells through telcos plans to use YEO as a customer billing communications portal.
Alongside all of this, the startup will continue to offer its iOS and Android apps, with an increasingly business-led focus. Voice and video chat support is on the roadmap, at which point Jones believes it will be a secure messaging product that matches up to most of what WhatsApp and Signal offer, with the added benefit of continuous user authentication.
YEO will charge businesses on a per-user-per-month basis.
Jones and Norford-Jones are a father and daughter team, joined by a third cofounder, Luca Rognoni, who brings security tech expertise to the table. Add in the development team, and YEO has a current headcount of eight.
Investment, vision, competition, and challenges
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