I am excited to share Atland Venture’s investment in TransCrypts, a record management startup using blockchain to give individuals ownership over their own data.
Life milestones like buying a new house or getting a new job often call for us to retrieve employment and income verification documents from our current or past employers. The part of this process we don’t see is the human resources team on the back end, handling the request, building the report, and sending it to the appropriate party. Companies have employees and sometimes even teams dedicated entirely to this specific function. Outside of hefty labor costs, the human element of the process opens up room for compliance-related issues which can cost companies millions of dollars. Many employers likewise have looked to outsource this function, using third parties to handle employee requests. Incumbent players like Equifax have dominated the space for years.
Why don’t we just own this data ourselves?
That is the exact question Zain Zaidi asked himself when founding TransCrypts. The idea came before his first year at Harvard Business School. It was three weeks before school was supposed to begin, when Zaidi received an email that his official undergraduate transcript was never received. Turns out, the third party Zain had requested his transcript through had failed to deliver it to the correct address. While he was lucky enough to quickly pivot and fix the issue – he thought to himself… there has to be a better way. A year later, Zaidi dropped out of school to found TransCrypts. Detecting a clear point of market entry, Zaidi decided to first go after the data ownership problem in the human resources (HR) space.
TransCrypts automates the employment and income verification process for HR departments. Its solution integrates with an employer’s HRIS (a software system that stores employee information) to automatically generate an individual’s employment and income verification report on a regular basis. The report is stored as a file on the blockchain and shared to an employee’s TransCrypt’s portal. When these documents are requested by a bank/future employer, employees can go into their account and share the documents themselves. Upon receiving the document, the bank/employer can easily verify its authenticity by using TransCrypts verification interface – where they can view the document’s origin and any changes that have been made to it (this is enabled through blockchain technology, which creates a permanent log of every change and altercation that has been made to the document). Essentially… with TransCrypts, HR departments do not need to manually respond to verification requests, saving time and eliminating compliance-related headaches. Simultaneously, individuals have access and power over their own information.
Atland’s investment into TransCrypt funneled down to a couple themes
- In early-stage investing, you always hear that team comes first. However, you don’t realize it until you meet a founder like Zaidi. He is one of the most patient and articulate founders I have ever interacted with. His ability to distill TransCrypt’s solution into words that even a 5th grader would understand speaks to his deep knowledge of the problem, technology, and industry. Put simply, he is a leader that I would want to work for. Zaidi has a background in electrical engineering and worked at JP Morgan before starting TransCrypts. His co-founder and CTO Ali Zaheer, has extensive experience working with blockchain technology and previously ran his own blockchain consulting firm.
- TransCrypts has strong traction, demonstrating clear signs of product/market fit. At their early stage, we were impressed with the team’s ability to lock down impressive middle market & enterprise clients for both pilot and paid plans. Notable companies include Zoom and Spirit Airlines (view associated case studies here and here). Through these clients, TransCrypts has been able to deliver quantifiable value through time and cost savings.
- Technology. TransCrypt’s specific application of its patent-pending blockchain technology demonstrated defensibility and competitive differentiation. We also liked how Zaidi and Zaheer purposefully designed and marketed TransCrypts as a solution that required absolutely zero knowledge of or interest in blockchain.
- The potential for TransCrypts spans well beyond employment and income verification. TransCrypts has the potential to tackle record management not only in the HR space, but also in entirely unrelated industries (medical, legal, educational, financial, etc.). Last year, for instance, TransCrypts utilized its platform to help over 500 Ukrainian refugees store and transport their medical records (check it out here). These opportunities for expansion signal that TransCrypts has the potential to become something big… really big.
While record management is not the sexiest thing in the world, TransCrypts is solving a problem that touches all of our lives – data ownership. After hearing Zain’s founding story, every single fund member echoed a similar experience/frustration. Why don’t we own this data ourselves? TransCrypts has turned a timely and frustrating process into one that is simple and people-centric. This is the type of disruption Gen Z is looking for as we enter the workforce. We look forward to seeing all that TransCrypts becomes and continuing our support well into the future.