Validity Sensors Raising $20M From Qualcomm, TeleSoft To Bring Fingerprint Security To Mobile Payments

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Validity Sensors, the San Jose-based maker of fingerprint scanning sensors and authentication technology, announced today that it has closed $10 million of a $20 million series E financing round. (It will close the second half in the next month.) The investment was led by TeleSoft Partners, with participation from Validity’s previous investors, including Crossslink Capital, Panorama Capital, Qualcomm Ventures and Venture Tech Associates. The round brings Validity’s total funding to $78.6 million.

While there are tons of security apps and password lockers that help keep mobile devices, computers and sensitive digital info secure, the prevailing form of authentication still comes in the form of good ole passwords and PINs. Of course, most people use the same password for multiple different accounts, or have a tendency to forget the complex ones login pages ask them to create.

As we’ve all learned, these forms of authentication are difficult to remember, ineffective and fairly easy to hack. With the exploding growth of mobile payment transactions and cloud-based services, new (or better) forms of security are needed to protect our data both in the cloud and on the go, especially considering the expected growth of mobile payments — and how frequently we’ll be using our phones to pay bills, receive coupons and coupons and location based offers etc in the next few years. That’s where Validity Sensors wants to enter the picture.

Validity and companies like it believe that, even with advances in multi-factor authentication technology (facial, voice, etc.), fingerprints are still the best and simplest way to verify identity. The company has developed fingerprint sensor tech that enables authentication, device login, access to digital and mobile wallets, password management, app launching and so on — for smartphones, tablets and notebooks.

In the future, this tech will move to allowing content control for home media usage and home automation and monitoring, and really access control to a wide range of things (namely robot butlers). Collectively, all these apps need a simple way to securely authenticate the user’s identity — that isn’t going away any time soon.

The company’s mobile fingerprint solution provides handset designers with a solution that can identify users, protect mobile payments and launch (and log user into) email, social networks, shopping and banking — just by swiping their finger. Partners can then integrate Validity’s technology in under-glass solutions or add it to home and power buttons on mobile devices and notebooks. Currently, Validity’s solutions support Android and Windows operating systems.

Since launching its products in 2008, Validity has shipped more than 30 million sensors to OEMs, focusing initially on PCs. More recently, it has turned its attention to the smartphone and tablet markets, and its new $20 million round will be used to support that push.

Another few potential up-sides for Validity? In May, the company nabbed the former head of PayPal’s mobile ecosystem, Sebastian Taveau, making him CTO.

Secondly, in July, Apple bought its largest competitor, AuthenTec, for $356 million. Among other things, AuthenTec is known for making fingerprint sensor chips that are embedded in computing devices to enhance security and identification — sounds familiar, right? Apple’s acquisition came about a month after the company had signed a deal with Samsung to become its security and device management partner for its Android devices.

By pushing more aggressively into the mobile space and bringing on capital from strategic, mobile and software investors, Validity is hoping for comparable outcome.