Can OpenID Be Commercialized? Investors Bet $3.25 Million On JanRain

JanRain has always been on the forefront evangelizing OpenID, the decentralized authentication method for the new Web, as a founding member of the OpenID Foundation. But the company is not a non-profit, and aims to turn the deployment of online identification technology in enterprise environments into a viable business.

JanRain just got a vote of confidence from three U.S.-based venture capital firms: we’ve learned that the startup has recently raised a $3.25 million Series A round of financing led by DFJ Frontier with participation from RPM Ventures and Anthem Venture Partners.

JanRain’s flagship product is RPX, an SaaS platform for on-site acceptance of OpenID accounts for registrations and other activities, which as you may know can just as well be your MySpaceID, Windows Live ID or your regular Facebook, Google, Yahoo! account. It’s worth noting that RPX is a solution that works both ways, as it also enables users to publish their activities on client’s websites to multiple social networks.

According to JanRain, its solution is already being used on more than 170,000 websites today, including those of Sears, Kmart, FOX News, Scout24, Universal Music Group and EMI Music.

The software comes in three flavors: a free version that supports up to 6 interface providers and includes basic profile data, and two professional versions, the cheapest one starting at $100 a year. There’s a clean overview of available plans and corresponding pricing on the RPX product website.

JanRain is really one of the only horses in this race, but the adoption of OpenID hasn’t exactly been stellar so far. Investors are now betting millions on the assumption that the Portland, Oregon company, founded in 2005, has what it takes to effectively mass market and sell authentication systems to website publishers based on OpenID and other online identity technologies.

Would you?