London-based Onfido, which specialises in artificial intelligence for identity verification, could be valued at approximately $650m (£513.5m), the sources said.
If an agreement is finalised, the announcement could be made soon, they added.
In a statement to Reuters, Onfido said: “We are excited to be entering into early and exclusive discussions for Onfido to be acquired by Entrust, a global leader in trusted payments, identities, and data security.
“We are not able to comment further until these discussions are finalised, subject to regulatory approval and local law.”
Entrust, previously known as Entrust Datacard, is known for its involvement in various industries, including payments and healthcare, where it provides security and identity verification services.
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The company has a history of strategic acquisitions, including the purchase of Evidos, a Netherlands-based company, in 2022.
TechCrunch, citing sources, has reported that Entrust’s acquisition of the London-based company could be for a sum significantly higher than $400m.
In an interview with TechCrunch, Entrust CEO and president Todd Wilkinson said that following the deal, the company intends to include Onfido’s products into its larger technology stack.
“As we bring Onfido together with Entrust, we’re going to have a leadership position pretty much across that identity lifecycle,” he added.
Onfido was founded 12 years ago by Husayn Kassai, Eamon Jubbawy, and Ruhul Amin and has since attracted investment from several notable backers.
Among them are Salesforce‘s venture capital arm and key private equity firms such as Bain Capital and TPG.