Skip to main content

On April 29, the day after Delta Air Lines (DAL) announced a groundbreaking deal to purchase Bombardier C Series jets, it announced another lesser deal: It partnered with a biometric security company called Clear.

In both cases, association with the Delta brand benefits the companies, bringing attention and respectability, especially to the C Series, which had lacked an order from a major U.S. airline.

In the Bombardier deal, Delta got new airplanes cheaply. In the Clear deal, it got a 5% ownership stake in the fledgling private company and the chance to offer Clear membership free to its premium flyers and discounted (from the list price of $179 annually) to other passengers.

Moreover, Delta invested in emerging biometric technology, which so far is rich in promise but limited in execution, at a time of increasing demand for security and screening. Delta didn't disclose its investment, which a source said was more than $1 million.

"Every day we focus on strengthening security, on bringing in consumers, of staying ahead of where the world is going," said Clear CEO Caryn Seidman-Becker, a one-time hedge fund manager. "I have a passion for building companies that make a difference."

At 13 airports, Clear scans member irises or fingerprints. Members can then bypass preliminary Transportation Security Administration identification checks and go to the head of the line for TSA screening.

Delta spokesman Morgan Durrant said Clear means "our most valuable customers spend less time at security checkpoints." But travel columnist Joe Brancatelli said Clear enrollment has little value for people already enrolled in the TSA PreCheck program. "Clear is a waste of time and money," Brancatelli said. "It does less than PreCheck in fewer airports."

Told that some airline observers see little value in Clear membership, Seidman-Becker responded, "Here's what I would say: We bought this company six years ago out of bankruptcy, and people said, 'Why did you buy this thing?

"I'm a contrarian by nature," she said. "We've been on a path to build this platform, to strengthen security. We're now in 13 airports, scaling to 25." She said more than 40% of Clear customers are PreCheck eligible.

Was Delta's buy-in significant? "Delta's alignment and recognition has been exciting and meaningful for our company," she said. "As a little company, you feel you're pushing a rock up a hill, and when a big company says 'we love what you're doing,' it's incredibly exciting.

"But there's been a lot of exciting moments for our company {including} our first biometric boarding pass with Alaska {Airlines} and our first major league ballpark (in San Francisco)," she said.

In 2015, Clear tested its biometric screening with a small sample of about 200 Alaska passengers at Mineta San Jose Airport. As for baseball, Clear screens fans attending Colorado Rockies, Miami Marlins, New York Mets, New York Yankees and San Francisco Giants home games.

The concept is the same at ballparks and airports. Since Clear knows its members, it can quickly identify them with iris or fingerprint scans, reducing the time it takes to pass through checkpoints.

Founded in 2003 by entrepreneur Steven Brill, Clear initially got into 20 airports. A few months after Brill left in 2009, it shut down suddenly and sought bankruptcy court protection. In 2010, Alclear Holdings, cofounded by Seidman-Becker, bought it in bankruptcy court for about $5.7 million.

Clear does not disclose financial results, but Seidman-Becker said 2015 revenue was in the tens of millions of dollars. "We are on course to double revenues this year, we have a strong balance sheet" and enrollments are up more than 200% year to date, she said.

About 90% of revenue derives from travel, she said, and travel is awash in opportunity, not just to clear security, but also to complete airport transactions without fumbling for a credit card. Rather, Clear links to member credit cards and a Clear scanner quickly recognizes a member's fingerprint or iris.

"You think of curb to gate, using a biometric boarding pass and biometric payments {for airport vendors}," Seidman-Becker said. "Today, a significant use case is the airport security checkpoint, but we can continue to go broader throughout the airport."

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.