E-commerce fraud prevention solution provider Riskified received a new round of series C “growth stage” funding totaling $33 million, which brings its total funding to $64 million. The company said the funding will help it continue to develop its technology as well as grow its team in Tel Aviv and in New York, and also “expand into new markets.”
The firm’s solution leverages a machine learning algorithm and behavioral analytics to help mitigate fraud. Riskified’s technology also uses its own, broad network to “amplify” fraud prevention for its user merchants. The company’s solution works by reviewing transactions for signs of fraud — without impacting the consumer’s shopping experience.
“Retailers including Foot Locker, Simplehuman, Macy’s and many more rely on Riskified to provide a better customer experience while lowering overhead,” the company said in a statement. “Riskified has reviewed hundreds of millions of transactions and approved billions of dollars of revenue for merchants across virtually all industries, including a number of Fortune 500 companies.”
Riskified said its latest round of funding was led by Pitango Growth along with Capital One Growth Ventures, Groupe Arnault (the controlling shareholder of LVMH) and C4 Ventures. The company said existing investors also participated in the round. “Riskified plans to use the funds to accelerate market penetration, solidify its position as the market leader and serve new merchants internationally,” the company added.
Eido Gal, cofounder and chief executive officer of Riskified, said the commitment of its investors “further validates our technology and approach to fraud prevention.”
The company said Aaron Mankovski, managing general partner at Pitango Growth, will join its board of directors. Mankovski said fraud management “has reached a point where in-house solutions are not good enough to protect e-commerce sites. Network solutions like Riskified are becoming a must-have for e-commerce merchants.”
Emilie Grunzweig, senior fraud analyst at the company and who is based in Tel Aviv, told WWD that the growth of online shopping and the use of security chip embedded credit cards is driving criminals to engage in online fraud. And it’s especially prevalent in fashion apparel, Grunzweig said adding that cross-border transactions in apparel have climbed to 44 percent of online sales from 38 percent just a few years ago. More cross-border transactions means a greater risk of online fraud.
Grunzweig said the growing prevalence of online fraud is also due to criminals possessing a higher degree of sophistication and deployment of new technologies as well as simply gaining experience over time. The machine learning capabilities of the company’s solution is adept, though, at studying patterns and looking at transactions in greater detail – and doing it much faster than human fraud agents.
Aman Sharma, partner of Capital One Growth Ventures, said e-commerce fraud is a “rapidly evolving threat to merchants everywhere. Riskified has shown a deep understanding of the fraud landscape and a keen ability to recognize fraudulent orders, helping better equip its customers to tackle this threat head-on.”
The company said that staying ahead of fraud “requires a significant investment of time and resources, and even the best in-house solutions only have access to orders placed on their systems. Riskified pulls from exponentially more data points to get a fuller picture of fraudsters and buyers.”
Other investors that participated in the funding included: Qumra Capital; The Phoenix Insurance Company, and Genesis Partners. Last fall, Riskified opened its office in New York City.
“We’ve gotten smarter, but so too have the fraudsters,” Gal noted. “These investments will help us continue to grow, staying ahead of our competition, outsmarting e-commerce fraud and helping our merchants build successful businesses.”
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