Editor's note: This article is part of Inc.'s 2016 Best Industries report.
In 2016, why do you still need a card with a barcode on it--perhaps even with your photo as well--to check into a gym?
At MobiusFit, a fitness center with 2,500 members in the middle of Silicon Valley, that's no longer the case. Instead, you hold the palm of your hand over a kiosk made by Noatta, a Palo Alto-based biometrics startup, for less than two seconds. You touch nothing. Your palm essentially acts as your membership card (or as your smartphone, if your gym uses digital IDs). The kiosk uses near-infrared light to capture the pattern of veins in your palm, which is unique to each individual. Customers uncomfortable with the technology can hand-type their membership ID on the device's keypad.
"In our industry, you can go everywhere, from the low end to the high end, and everyone has access problems at the point of entry into the club," says Gordon Bliss, 57, the owner of MobiusFit. Prior to using Noatta's kiosks, he'd tried fingerprint scans. Members found it invasive and unhygienic. By contrast, he says, Noatta's kiosk "is a glorious and beautiful working system."
Technology like Noatta's falls into the growing industry known as biometrics, a term that comprises many elements. One of the biggest is called single-factor authentication, which in plain English means verifying an identity by using a biological indicator (a retina, a voice, a face, a fingerprint, or in the case of Noatta and competitors such as Biyo, a vein pattern). The technology has a wide range of potential applications, including check-ins, building access, payments, online security, and identifying criminals for law enforcement purposes. The scan of a body part could even serve as a substitute for government IDs like driver's licenses and passports. According to a report from research firm Radiant Insights, global biometrics was a $7 billion market in 2014, and will rise to $44.2 billion by 2021.
Founded in 2012, Noatta, which has five remote employees, is short for "no attachment," as in: You're no longer attached to an ID card, wallet, keychain, or phone. MobiusFit is one of three Silicon Valley locations where Noatta is beta testing its kiosk--the tablet-size reading device pictured at the top of this article.
The two other locations provide clues to the types of check-in settings and vertical markets where founder and CEO Biswajit "Pat" Patnaik, 49, hopes Noatta can become a fixture: the corporate campus fitness center at the Pacific Research Center in Newark, California, and the self-service snack bar at the Enerspace Palo Alto co-working space. (The latter also happens to be where the Noatta team gathers whenever they need to meet in person.) In addition, Noatta is in discussions with a major international airline. Patnaik can't say which one just yet, but it is negotiating a beta rollout of Noatta in one of its airport membership lounges for frequent flyers.
When Noatta moves from beta to full-fledged commercial launch depends on funding. The company is in the midst of raising a $500,000 bridge round, to be followed, it hopes, by a $5 million Series A round. The sooner the money comes, the sooner Noatta will begin selling in earnest. The good news, from Patnaik's perspective, is that the product itself is ready for the market, thanks to six months of real-world beta testing at places like MobiusFit.
Beyond verifying someone's identity for admission to a gym or lounge, Noatta also has the potential to facilitate no-touch transactions. Here's how it would work: Users link their Noatta accounts, where their palm data is stored, to a PayPal account or another system of points or payments or credits, like those in frequent flyer programs, on college campuses, or at Costco. They can then use their palm for payments, in the same way many people today use Apple Pay with their phones, except that with Noatta, you wouldn't need to have your phone with you. Or if you were in the middle of a phone call, you could keep talking.
The whole world in your hand.
As it happens, Noatta is part of PayPal's startup blueprint program, which provides mentorship, networking, and $1.5 million in free transactions through the payments company. "We don't have many startups doing what he's doing with biometrics and the internet of things--and already having a readily accessible market for it," says David Chen, startup adviser at PayPal.
Fujitsu makes the scanning hardware in Noatta's kiosk. Dan Miller, global security sales manager in Fujitsu's Chicago office, has worked with the startup on the kiosk for the past year and a half. "They've got a product people really like to use," he says, citing the successful Bay Area betas.
Miller is sanguine about the security of Noatta's product. He says that while fingerprints and faces can be copied and stolen, forgery isn't an issue with palm vein recognition, since the near-infrared scan reads not only the unique geometry of the palm's veins, but also the flow of blood in those veins. "It's almost impossible to make a hand pump blood and create the same vein pattern and blood flow as someone else," he says.
Another benefit--for now, at least--is privacy. The government may have your fingerprints. The cloud has photos of your face. Palm scans come with less Big Brother baggage. As a result--and as MobiusFit has observed during its Noatta beta--customers may view them as a less invasive form of biometric scanning.
Patnaik moved to the U.S. from India in his mid-20s, and spent four years consulting in the Bay Area for major consulting firms. Then the entrepreneurial bug hit him. Prior to Noatta, he founded several software-as-a-service startups and one-off projects. None of them lasted, but through them he learned lessons he's applying at his current company about the importance of beta testing, customer verticals, and key partnerships.
Down the road, Patnaik envisions Noatta's making an after-market, IoT-enabled device. This device would potentially open your front door, start your car, or control your thermostat without the need for a physical key or a phone app. "The way I look at it, this is a natural process," Patnaik says. His big-picture thinking is that people should not have to carry keys or a wallet on their persons, or their passwords in their heads, anymore. If you're on the beach, you should be on the beach, care-free, but still able to shop--without worrying about where your valuables are.
You should, in other words, have a "no attachment" lifestyle. "It's all about creating a convenience," he says. "It's what Uber did with cabs. The entire need is to get a car, not to hand the driver payments. You want to do yoga, not deal with a card or handing money to someone behind the counter."