Fueled by Mobile Transaction Technology, Mitek Systems Raises $15M for Nasdaq Move
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president or CEO three times for a total of seven years between 1991 and 2003. Nowadays, he says the outlook for the company is “vastly improved.”
As a defense contractor, Mitek provided hardware security and copper shielding that prevented Soviet-bloc eavesdroppers from using directional radios to monitor electronic data transmission across U.S. military computers, scanners, faxes, and printers. Demand for the company’s security products plunged sharply with the end of the Cold War, and Mitek struggled for years to rebuild its business.
In late 1992, Mitek purchased handwriting-recognition technology from San Diego data analytics pioneer HNC Software, eventually developing check fraud technology that banks could use to scan and convert printed documents into digital data. By 2009, Mitek’s “intelligent character recognition” technology was being used to process more than 10 billion checks a year. But revenue amounted to only $6.6 million in fiscal 2005, and came under increasing pressure in subsequent years amid a general decline in back-office check processing, and as consolidations remade the financial services industry.
Regulatory changes that authorized the processing of imaged checks and the emergence of the iPhone and other smartphones led Mitek to apply its expertise in character recognition software to develop a mobile deposit application in 2008. The company has developed a variety of mobile applications since then, including what Mitek calls Mobile Receipt, Mobile Phax, Mobile ACH (Automated Clearing House) Enrollment, and Mobile Photo Bill Pay.
“The company has gone through about four different lives, and this is undoubtedly the hottest and most important,” said Thornton.
“If you think about this, ultimately your camera is connected and it can be ‘context aware,’” says DeBello, explaining that software analytics can be used to “understand” the meaning of scanned documents. Besides, people no longer want to type in their personal data. He sees a host of potential applications for users who currently fill out forms when they submit online applications for loans, insurance, health care, and other services. “That’s the future. We’re currently looking for other applications that are what I call pain killers.”
Even with the surge in its sales, Mitek has only about 30 employees today. DeBello explains, “The reason we’re so efficient and low-cost is because we’re leveraging 15 years of R&D.”
DeBello has no shortage of optimism about where the company might go from here. Like Google and Skype, he says, “We’re hoping to make Mitek a verb.”