Digital Identity Small-Caps To Keep Your Eye On

Digital Identity

I’ve thought a lot about digital identity verification over the past few years - at one point, I thought that there was a non-zero chance Bitcoin miners would pivot into blockchain-based verification instead of continuing down their existing path.

While that prediction didn’t come to fruition (yet), there’s a growing hunger for digital identity verification as platforms like Reddit explore Tools for Humanity’s World ID, an iris-scanning system that confirms user authenticity while (ostensibly) preserving anonymity.

Reddit’s specific push for quality verification stems, in part, from revelations that AI labs were using Reddit subs as a testing ground for Turing Test-esque experiments.

Beyond Reddit’s specific beef, AI-generated content is flooding social media, and U.S. states are enforcing stricter age verification laws, creating corporate pressure to ensure users are human without compromising privacy.

While World ID may become one of Reddit’s verification options, users will likely have multiple choices, creating plenty of investment opportunity beyond Sam Altman’s creepy eyeball-scanning initiative.

OneSpan provides secure digital agreement and identity verification solutions, focusing on fraud prevention for financial institutions and online platforms.

Its cloud-based platform supports biometric and multi-factor authentication, and a running Microsoft Azure partnership expands its enterprise reach, making OneSpan’s scalable technology and steady subscription model a strong small-cap contender in the verification market.

Likewise, its cloud-based authentication platform, which includes biometric and multi-factor authentication, is well-suited for social media and eComm platforms complying with age verification laws while maintaining user privacy.

AuthID offers biometric identity verification and facial recognition solutions designed to prevent account fraud and ensure compliance with KYC regulations.

Its platform, which verifies identities in under a second, is gaining traction with enterprises needing to combat AI-driven bot activity, a specific challenge Reddit aims to address with World ID.

A recent partnership with verification platform Prove to fight deepfake and AI-genned fraud (synthetic identities and video fraud, specifically) underscores both its operational backbone and the wider need for adaptive digital ID tools.

👉 Interested in how Reddit may adapt World ID for digital verification initiatives? Read more here.

Energy Storage

Redwood Materials, led by former Tesla CTO JB Straubel, just launched Redwood Energy, a new business leveraging 805 retired EV batteries to create North America’s largest microgrid in Sparks, Nevada.

The inaugural system powers a 2,000-GPU modular data center for Crusoe, an AI infrastructure company Straubel invested in. The batteries (not yet degraded enough to be worth recycling) store solar energy, demonstrating a profitable, revenue-generating operation built in just four months.

Redwood currently recovers 70% of North America’s used battery packs and processes over 20 GWh annually, with plans to deploy 20 GWh of grid-scale storage by 2028.

Unlike many pie-in-the-sky GreenTech projects, Straubel’s microgrid prioritizes economic viability while remaining carbon-free and can connect to wind, solar, or the grid, marking a shift in the energy storage sector.

Eos Energy Enterprises $EOSE ( ▼ 0.43% ) develops zinc-based battery systems for long-duration energy storage, targeting utility-scale and commercial applications like data centers and renewable energy integration.

Its Znyth aqueous zinc battery offers a sustainable, non-lithium alternative with a 3-12 hour discharge capability, ideal for AI infrastructure and microgrid projects similar to Redwood’s.

Demand from data center operators and solar projects drives its market presence, while a new(ish) Pennsylvania manufacturing facility and partnerships with major utilities like Pine Gate Renewables strengthen its position in energy storage.

Eos was just added to the Russell 3000 over the past week, so look for a slight bump moving forward as the stock gets integrated into major index-tracking funds and ETFs.

👉 Here’s a deeper look at Redwood Materials’ planned microgrid expansion efforts.

Robotic Surgery

ForSight Robotics, an Israeli startup, raised $125M in a Series B round led by Eclipse Ventures to advance its Oryom robotic platform, the world’s first for cataract and other eye surgeries.

With a $500M valuation, the company aims to address the global shortage of ophthalmologists, with only 14 cataract surgeons per million people on average, with a record-setting 4 million annual U.S. cataract procedures.

Oryom, tested on 300 pig eyes and set for human trials later this year, uses microsurgical robots, computer vision, and machine learning to perform precise, cost-effective surgeries, potentially expanding to retina repairs and glaucoma treatments.

Backed by Intuitive Surgical’s Fred Moll, ForSight is in early FDA discussions targeting the U.S. market. The platform capitalizes on cataract surgery’s repetitive, bloodless nature, ideal for robotics, and seeks to close the gap between rising demand and dwindling surgeon availability.

While ForSight focuses on ophthalmology, Vicarious Surgical $RBOT ( ▲ 1.38% ) is developing the Vicarious Surgical System, a robotic platform for minimally invasive abdominal surgeries, using human-like robotic arms and VR-guided controls to enhance precision.

Vicarious targets a broad $90B soft-tissue surgery market, addressing similar challenges of surgeon shortages and procedural complexity, and is on track for FDA submission in 2026, supported by partnerships with leading hospitals like UMass.

I’d be on the lookout for potential acquisition action for Vicarious, with shares trading near all-time lows and cash dwindling while management sits on a goldmine of 80+ patents.

In some ways, this reminds me of iRobot’s appeal when Amazon made its acquisition bid (and not just for the ticker similarities).

👉 Check out how ForSight plans to disrupt surgical interventions with robotic platforms.