Vein-biometrics Firm Snowflake Technologies Raises $6M in 2 weeks

Jul. 12--You've heard of iris and fingerprint scans to verify identity. Now, consider the pattern of veins in your hand. Plenty of investors already have.

Snowflake Technologies, subsidiary of Memphis-based Luminetx, raised $6 million in two weeks to advance its vein biometrics into products companies and governments could be using as soon as 2007 to verify everything from employee and voter identities to frequent travelers.

"The potential is endless," said Jim Phillips, chairman and chief executive of Luminetx. "This could eventually make all transportation hubs safer, all workplaces safer and all transactions more secure."

Long term, Snowflake intends to replace all forms of ID -- passports, credit cards, ATM cards and driver's licenses -- based on systems that in "five minutes can be broken into by your average hack," Phillips said.

At an airport or workplace, Snowflake scans would allow travelers to pass a hand over a touchless scanner that would read the vein imprint and presumably admit the person to the terminal, office or computer system.

Snowflake, incorporated in 2005, raised $2 million more in its initial round of investment than Luminetx, which launched the VeinViewer in 2004. That technology illuminates veins up to an inch beneath the skin, making it a cinch for doctors and nurses to find them -- handy if needles drive you nuts, but potentially lifesaving if you need emergency intravenous treatment.

A biometric company that raises $6 million in its first try is "worth noticing," said Victor Lee, senior consultant at the International Biometric Group.

"It's a signal that people are beginning to value biometrics as an interesting potential investment. And not just in the biometrics community, but everywhere."

The market for biometrics, the science of using personal biology as an identity system -- is worth $1.7 billion today.

"It will more than triple by 2010 to $5.6 billion," Lee said, as the number of "government projects and private-sector deployments increase\rdblquote in areas that also include face recognition and voice recognition on technology as personal as cell phones and handheld computers.

Biometrics are increasingly included in time clocks to prevent buddies from punching in for absentees at work. There are also untold applications in catching fraud in voter registration and welfare checks.

Snowflake is the first U.S. company to develop vein-reading technology. Its only competitors are two firms in Japan that have products coming to market.

"Our patents give us a strong foundation in the U.S.," said Brad Silver, head of business development at Snowflake.

"We are going to come up with products that companies will implement as well as selling the necessary software to run the systems," he said.

Unlike fingerprints, a hand scan leaves no print behind that can fall into the wrong hands.

"Veins are never going to leave a print behind. They are part of you and you pick them up and leave when you go," he said.

Iris scans have also proven troublesome because they are "difficult for people with certain types of corrective eyewear and contacts," Silver said.

"We will be competitive with other biometrics. Snowflake has technical features and benefits that we are optimistic will allow us to play at the high end of the market."


--Raised $6 million to bring security products to market to as early as 2007.

--Address: 1256 Union

--Employees: Six

--Luminetx owns 62 percent of the company.