Ribbit Capital dumped $340M into ID.me yesterday. I've used their system three times and wanted to throw my laptop out the window each time. But here's the thing - it actually works when everything else falls apart.
I had to verify through ID.me for unemployment in 2020 when freelance work disappeared. Took me four tries because their facial recognition couldn't handle my beard and shitty apartment lighting. The app crashed twice when I switched to check a text message. Then I had to do it again in 2022 when someone filed a fake tax return with my SSN. Same nightmare process.
But you know what? I got my money, and the scammer didn't get theirs.
Every State System Got Owned During COVID
Here's what happened during the pandemic: criminals figured out they could mass-file fake unemployment claims using basic info from any data breach. Name, SSN, address - that's all most states were checking.
I worked at a fintech during this shitstorm. We watched unemployment applications spike 1000% overnight while state systems approved obvious fraud because they were built in the 90s and never expected this volume. ID.me was the only verification system that didn't immediately fall over and die.
They don't just match your driver's license photo to your face. They analyze how you move your head during the video call, check if your device location matches your address history, and run dozens of other behavioral checks that are impossible to fake at scale.
80 million Americans have been through this hell. None of us chose it - we got forced into it by state unemployment offices that had no backup plan.
Government Lock-In is Real Money
Every state that signed with ID.me during COVID is still using them. Switching identity verification systems in government is like replacing the engine while the car is driving - theoretically possible, but nobody's that brave.
Government moves slow and hates surprises. When unemployment claims exploded overnight, ID.me didn't crash. That's worth more than any sales pitch. Once you're embedded in government systems, you print money forever.
The UX is Garbage on Purpose
ID.me's interface is intentionally frustrating because making it user-friendly would make it scammer-friendly too. Real people will spend 30 minutes taking blurry selfies if it means getting their unemployment check. Bot farms running 10,000 fake applications won't.
The $340M won't fix the user experience - it'll expand to more agencies that need the same awful-but-effective verification. This is a feature, not a bug. Works great until you need to use it yourself.