Home » What chip shortage? MagicCube raises $15M to ‘replace all chips,’ commencing with POS terminals – TechCrunch

What chip shortage? MagicCube raises $15M to ‘replace all chips,’ commencing with POS terminals – TechCrunch

What chip shortage? MagicCube raises $15M to ‘replace all chips,’ starting with POS terminals – TechCrunch

MagicCube, a cellular safety startup, has lifted $15 million in a spherical led by Mosaik Partners.

Daring Capital, Epic Ventures, card-reader/POS hardware maker ID Tech and unnamed individual traders in the fintech house also participated in the funding, which delivers the Santa Clara-based mostly startup’s total funding elevated to $30 million given that its 2014 inception.

Place simply, MagicCube’s software program-centered protection technology is aimed at replacing all protection chips, which have historically been the standard for securely storing delicate facts and authenticating whoever requires obtain to it. And it’s setting up with money services. The company’s technology lets retailers change cellular products into payment terminals. Or in other words, it presents retailers a way to take card payments on any customer product with no reader or extra components required.

“We are on the verge of a large paradigm shift when it comes to how we protected information on all kinds of devices, specially the kinds utilised for fiscal transactions,” stated MagicCube CEO Sam Shawki. “The chip lack that is halting whole industries and mountaineering device selling prices has uncovered how antiquated the present approach is and how valuable MagicCube’s solution is to deal with this difficulty — this spherical demonstrates that.”

Shawki, who formerly served as head of Visa’s world-wide remote payments company unit, co-launched MagicCube with his wife Nancy Zayed, who expended decades operating on the OS team at Apple. The pair, who are of Egyptian descent, started off the company in an effort and hard work to create technology that would get rid of the will need for components when it will come to cellular safety.

Visa is truly an investor in MagicCube, having backed the enterprise in August of 2020 and one more time just before that. Other backers in the organization contain Azure Capital Companions, Epic Ventures, NTT Info, Silicon Valley Bank and the Sony Innovation Fund, amongst others. (Sony’s VC fund invested an undisclosed amount of money in MagicCube in late Could 2020). 

That August 2020 financial commitment came on the heels of Apple’s $100 million acquisition of MagicCube competitor Mobeewave, a Montreal startup whose software turns iPhones into cell payment terminals. MagicCube’s technology was reportedly expected to enhance Visa’s faucet-to-cell phone initiative. The Apple/Mobeewave offer did not deter Shawki, who thinks that his startup “will be the dominant occasion on the Android facet, which is 85% of the universe.”

MagicCube’s first application facilities on computer software POS, or softPOS for small. Working with a smartphone or other cellular system, a service provider can get softPOS payments without the need of the need for added hardware, these kinds of as a regular POS terminal. Payments by using contactless playing cards and electronic wallets can be accepted from an array of economic solutions vendors via an array of cell equipment with the same stage of safety as a chip, in accordance to the business.

MagicCube also claims that its software-based mostly Dependable Execution Natural environment (sTEE) “is the to start with and only software solution” to be acknowledged by EMVCo, the consortium that oversees the world infrastructure for chip-based mostly payment cards and acceptance equipment — to supply a amount of defense that is comparable to hardware-centered ways.

“What we can do with our know-how is to simplify,” Shawki explained. “On your credit card, there is a SIM card that is essentially a metallic secure. What MagicCube has is this know-how that is a digital safe that is pure program that can conceal insider secrets and code, serving a similar function to a actual physical harmless. And this is substantial simply because not like rivals, we can disguise details in that digital safe… And of course this is established, patented and a big offer.”

Image Credits: MagicCube

MagicCube claims that its sTEE is flexible and can be utilized across a wide range of use cases to replace hardware-secure elements this kind of as SIM playing cards, chips used on Internet of Factors (IoT) devices like autos and wise home appliances, and even bank-grade Hardware Stability Modules (HSM). The company’s to start with product or service, i-Take, was created in an energy to disrupt the more than the $70 billion for every 12 months put in by banking companies and merchants everywhere you go on stage-of-sale card viewers.

By means of i-Take, attaining banking companies and other financial expert services establishments give merchants and stores a way to take payment cards, contactless transactions and cellular wallets this kind of as Apple Fork out, Google Shell out and Samsung Spend — all at “card present” prices for retailers and without having limitations on transaction amounts for individuals. MagicCube suggests that its i-Take item can also capture fiscal PINs and other verification approaches on any cell unit, like phones, tablets and significant smart screens — with no the will need for focused hardware or terminals. 

The business options to use the funds used in its most recent funding spherical to accelerate deployment of its software-centered protection products and solutions. MagicCube also strategies to extend its product sales and purchaser shipping teams as well as speed up development of products aimed at serving some of the industries most afflicted by the chip scarcity, this kind of as crypto wallets, cloud and in-automobile stability, between some others.

Howard Mergelkamp, lover at Mosaik Companions, thinks MagicCube’s know-how is “truly unique” and just one that the economical services business in distinct has “reached the tipping stage of each drive and need to have for adoption.”

“This tech can assist mobile and IoT products with a system that is uncomplicated to integrate and not sure by system makers or particular use instances,” he said. “This is unheard of on the recent landscape.”

MagicCube’s technological innovation is the “killer app” exactly mainly because it is not an “app,” he included.

“It is tethered to neither a components system or ecosystem (à la Apple), nor a particular stability specification or protocol, nor a precise program solution,” Mergelkamp ongoing. “MagicCube can deliver its ironclad security to any application-enabled system, comply with the protection requirements of any sector (this sort of as payments or healthcare) today or tomorrow, and combine into any company’s current methods to permit that business to manage total possession and command of its facts.”