As Clear Secure Takes Off In $4.5 Billion IPO, CEO Caryn Seidman-Becker Eyes A ‘Frictionless’ Future
When Covid lockdowns took hold last March and sent the global travel industry to a sputtering halt, Caryn Seidman-Becker was not entirely surprised. The cofounder and CEO of biometric screening company Clear Secure had been watching the virus unfold around the world and knew she had to prepare for a time in which a fast-pass through the airport security line might not be a traveling priority.
“One of the benefits of age is living through a few crises. And so, after living through 9/11 and living through the financial crisis of 2008 and 2009, we think it’s management’s job to look around corners,” she told Forbes on Wednesday.
And so, as U.S. airline passenger volumes plunged 60%, Seidman-Becker cut the company’s marketing spend, tightened the operating budget and directed the development of something called Health Pass, an in-app product that tracks users’ Covid-19 test results, vaccination status and answers to a real-time health survey.
Her foresight proved valuable: Clear Secure made its public market debut on Wednesday, and investor appetite sent shares soaring immediately upon its open. After pricing at $31 per share Tuesday night—above the $27- to $30-per-share range it had targeted and giving the IPO a $4.5 billion valuation—Clear’s stock opened for trading on the New York Stock Exchange at $38.55 just before 11am ET, and hit $42.10 by noon. The stock closed at $40.43, a 30% gain that puts Clear’s market cap at $5.8 billion and gives Seidman-Becker a stake worth approximately $826 million. (The stock ownership is structured as a partnership, to be tax efficient for founders.)
“I think people have really started to understand the power of a secure identity platform, both in travel and beyond,” Seidman-Becker says.
Listed under the ticker “YOU” (a nod to the company’s motto: “you are you”), Clear begins its life on the public market as travel inches closer to pre-pandemic levels, with the TSA processing more than 2 million travelers in four out of the last eight days. But while Clear is best known for facial-scanning tools that let users bypass long TSA lines and sees its largest member acquisition channel through airports—which drove 72% of new subscriptions in 2020, and 62% in 2019— Seidman-Becker said Wednesday that she hopes that one day, aviation is her company’s smallest vertical.
“We want Clear to become part of people’s daily habit, to go from 12 times a year using it—which is how people on average were using it in airports—to 12 times a day,” she says. “We want to create frictionless, predictable experiences from the time you leave your house to when you get to your office or the theatre.”
We started in the hardest place: aviation. If it was good enough to get on a plane, where identity and security are paramount, clearly—no pun intended—it’s good enough that to check in at the doctor’s office. – Clear Secure cofounder CEO Caryn Seidman-Becker, speaking on her company’s future
Clear has has a bit of a way to go to meet that vision, but it is scaling: it has secured 5.6 million total cumulative enrollments to its $179-per-year subscription service and a footprint that covers 38 airport locations (which comprises close to 60% of the total 2019 TSA departure volume) and 26 sports and entertainment venues. Some 67 organizations, including Danny Meyer’s Union Square Hospitality Group and the San Antonio Spurs’ AT&T Center, have signed on to use Health Pass for employees and customers. In 2020, these initiatives drove $230.8 million in revenue, up 20% over 2019 (though the company did record a net loss of $9.3 million, an improvement over 2019’s $54.2 million loss).
“What we realized quickly last March was that there was going to be another card in your wallet, and that was your vaccine card,” Seidman-Becker said, noting that she had to carry a yellow fever vaccine card when she visited Kenya a few years ago, so the idea was not an entirely foreign concept when Covid hit. The move towards a health-oriented product was not a pandemic pivot, either: Seidman-Becker says that before Covid lockdowns began, the company had started a pilot at a doctor’s office in Phoenix, Arizona that allowed patients to use their faces to check in for appointments.
“We started in the hardest place: aviation. If it was good enough to get on a plane, where identity and security are paramount, clearly—no pun intended—it’s good enough that to check in at the doctor’s office,” she says. “We had a HIPAA-compliant back end and being so focused on being secure and scalable to the aviation business meant it was applicable to so many other businesses.”
Seidman-Becker says that the plan to go beyond aviation has been baked into the company since she and business partner Ken Cornick bought it out of bankruptcy in 2010. “Through this roadshow, we’ve been sharing our pitch page from 2010,” she noted. “And it says that Clear’s aspiration was to be a biometric secure identity platform today in travel and tomorrow in verticals beyond.”
Seidman-Becker believes that Covid has accelerated contactless technology trends and consumer comfort with these tools, but some public figures are expressing concern over the privacy considerations around the biometric and health data that Clear collects. In a May letter to Clear, Senators Jeff Merkley and Cory Booker noted, “Though there are some potential benefits and expediencies, this technology can also be utilized widely and passively in such a way that eludes consumers’ awareness, permission, or the ability to opt out. If over or misused, facial recognition technology risks a state of undetectable, constant government surveillance that can track one’s movements and associations with organizations such as schools and places of worship.”
Seidman-Becker replied in June by saying, in part, “We do not conduct passive monitoring and we do not collect images of non-members.” She reiterated to Forbes that Clear “will not sell or rent your data.”
A one-time college journalist for the Michigan Daily (she covered the sports beat), Seidman-Becker started her career as a junior analyst at Arnhold and S. Bleichroeder, a New York investment shop, and by 29 she’d raised $50 million to start her own hedge fund, Ariance Capital. “I was highly atypical,” she told the University of Michigan alumni magazine in 2017, noting that she’d also been pregnant when launching the fund. “It was the first time that someone brought to my attention that I was different.”
In taking Clear public Wednesday, Seidman-Becker continues to operate in rarified territory: Going into 2021, only 20 listed companies on the New York Stock Exchange were female-founded and led. The IPO activity of the first half of the year has helped inch that number forward: Bumble founder and CEO Whitney Wolfe Herd took the dating app public in February, FIGS founders Trina Spear and Heather Hasson brought their trendy scrubs company to market in May, and Anne Wojcicki took 23andMe public via SPAC on June 17.
While these statistics haven’t escaped Seidman-Becker’s attention, more important to her than being a female leader is being an entrepreneur working to help society move safely out of a pandemic that has changed so much about American life.
“I wanted to keep my family safe, our team safe, and I wanted to be part of the solution,” she says. “I feel like that’s my opportunity in the world: to make it a better place. That’s how I send my kids off to school every day, and being part of the solution is very empowering.”
with reporting by Antoine Gara
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