IDnow: From early-stage VC to exit

In 2018, we at G+D Ventures made our first investment in the emerging field of TrustTech by backing IDnow, a Munich-based identity verification startup. At the time, as businesses shifted to digital services, the need for secure and seamless online identity verification became essential for everything from opening a bank account to signing digital contracts. With their remote video identification, IDnow was well-positioned to enable banks, FinTechs and businesses to confirm customer identities remotely.

Fast forward to 2025, and IDnow has become one of the biggest German FinTech exits in recent years after being acquired by Corsair Capital. As early investors, we’ve had the privilege of accompanying IDnow grow from a startup with an agile founding team to a European leader. Here are some of the lessons we learned along the way on how to scale from the early stage to a successful exit.

1. Agile, Experienced Teams Are Essential in Early Stages

When we first met IDnow, its founding team impressed us with their blend of repeat entrepreneurship and deep domain expertise. Experienced founders often have a more intuitive grasp of product-market fit and can pivot quickly if needed. In IDnow’s case, this agility was critical during the early days, when the company experimented with product features and business models to solidify its offering.

However, teams need to evolve over time. The skills and mindset required to go from zero to one differ from those needed to manage rapid scaling, larger teams, and complex operations. Successful startups must bring on senior leadership and specialists at the right moments. IDnow’s later-stage growth was supported by bringing in seasoned executives, starting with a Chief Product Officer and then, most importantly, a very growth-experienced CEO who then also added a capital-markets experienced CFO as well as a very seasoned Chief Operating Officer – to guide the company from a startup to a fast scaling growth business. Their experience, along with support from strategic partners, helped navigate bigger challenges – proving that flexibility and expertise at the top are essential throughout a company’s lifecycle. However, again timing is important: to attract very experienced growth managers, the business needs to be really growth-ready.

2. Market Momentum and Regulation Can Turbocharge Growth

Our initial investment thesis hinged on market momentum. Around 2018, the rise of digital banking, fintech apps, and tighter EU regulations made digital identity verification more important than ever. Traditional KYC (Know Your Customer) processes like postal or onsite verifications were cumbersome and broken from a user-experience standpoint. Companies across Europe realized the need for secure digital onboarding solutions that wouldn’t drive customers away.

IDnow hit the sweet spot of solving a universal pain point just as digitalization took off. Increasingly strict laws around AML (Anti-Money Laundering) and KYC gave the company a regulatory tailwind. It’s a powerful lesson: even the best product struggles if the market isn’t ready or the pain point isn’t severe enough. By aligning with a clear, urgent market need, IDnow could quickly convince banks, neobanks, and FinTechs to adopt its solutions.

3. Focus on a Winning Product First

Instead of trying to solve every identity challenge right out of the gate, IDnow focused on perfecting its remote video identification product for banks and FinTechs in Europe. This laser focus on call center-based video verification built a strong reputation in the industry and paved the way for future offerings. Over time, IDnow added automated ID solutions and qualified electronic signatures to its portfolio – incremental expansions that built upon the company’s core competency.

Many early-stage startups struggle by branching out too soon, building products for multiple markets before they’ve truly nailed product-market fit. IDnow’s success illustrates the power of concentrating on a single, compelling offering that customers genuinely need. Once that foundation is established, expanding to new use cases and geographies becomes much more manageable.

4. Prove Yourself in One Market, Then Expand

While IDnow always had global ambitions, it remained disciplined in the beginning by targeting regulated financial institutions in Germany / DACH first. The home market provided the ideal launchpad – large enough to support an early-stage startup while also serving as a proof point for meeting some of the strictest regulatory standards in Europe. Only after achieving their goal and solidifying their position at the market leader in Germany did IDnow accelerate its expansion, partly through strategic acquisitions such as Ariadnext in France.

Not overextending early on by pursuing multiple markets simultaneously was the right decision for IDnow. By first mastering the German market, IDnow built a strong foundation of credibility and trust among financial institutions that made it easy to scale across Europe and beyond. 

5. Right Investors, Right Time

Early-stage investors like G+D Ventures provide more than capital. We share networks, strategic guidance, and an understanding of the industry. Later-stage PE investors like Corsair Capital, which came on board in 2019, bring a different skill set, expertise, and extensive resources for maturing the company, large-scale expansions, acquisitions, and potential exit strategies. Finding partners who align with the company’s stage and vision can be a game-changer.

IDnow’s experience shows the importance of matching investors to where you are on the growth curve. An influx of capital and expertise at the right juncture can transform a promising startup into a market leader – while also laying the groundwork for a future acquisition.

6. Exits Aren’t Predictable – But You Can Tip the Odds

Even if the ultimate outcome of an exit is never guaranteed, certain factors can greatly increase the likelihood of a positive result. Strong leadership, a defensible product in a growing market, and timely capital infusions all helped IDnow carve out a leadership position.

Strategic choices – such as acquiring complementary businesses to fill product gaps or enter new geographies – further enhanced IDnow’s profile and performance. Even when the identity of the eventual acquirer remains uncertain, focusing on sustainable growth, a path to profitability, and robust technology ensures that a venture ranks highly on any shortlist of possible targets. Maintaining solid fundamentals paves the way for a smoother exit in the future, whenever the timing and external conditions align.

At G+D Ventures, we’re proud to have played a role in helping a pioneering TrustTech company realize its vision and create lasting impact. For early-stage founders eyeing a similar path, the takeaways are clear: Build an experienced, flexible team. Seize the market momentum. Win with a focused product. Expand judiciously. Bring in the right investors at the right moments. And remember – while exits can’t be precisely forecasted, the odds tilt in your favor when you align all these factors for success.

G+D Ventures remains committed to backing ambitious founders who share our passion for TrustTech and secure digital ecosystems. We believe that, as more of the world moves online, ensuring trust and security is not just an opportunity – it's a responsibility.