Immersion Investment Partners, LP on Red Violet
Thesis
Immersion argues that Red Violet's identity-verification business has been wrongly treated as vulnerable to AI disruption. Its CORE platform is itself AI-driven and continuously builds and updates profiles using billions of data points. The company also benefits from important reputational and security advantages because suppliers of sensitive data demand credible counterparties while customers require highly accurate information. Second-quarter results showed no evidence that clients were delaying spending or replacing Red Violet with internally built AI tools. Immersion also sees a new growth opportunity from Forewarn's expansion into healthcare, where incremental revenue could carry high profitability because the application uses the existing CORE infrastructure.
“The company's core identity offering is not exposed to AI threats.”
Key risks
- Customers could eventually attempt to build competing AI-driven solutions internally.
- The market may continue to classify the company as vulnerable to AI disruption.
- The healthcare expansion may not generate the anticipated incremental revenue.