Fraugster, a Berlin-based software outfit using AI to help online retailers prevent fraud, has raised $14 million in a Series B funding round led by Commerzbank's VC arm.
Earlybird, Speedinvest, Seedcamp and Rancilio Cube, as well as Munich Re / HSB Ventures, the VC arm of the global reinsurer Munich Re, joined the round.
Fraugster has developed a proprietary technology that takes data from multiple sources, analysing and cross-checking it in a fraction of a second, to determine whether a transaction is fraudulent or not.
Payment service providers ePayments and Six Payments are among the firm's clients, using the technology to monitor millions of transactions.
Munich Re is insuring Fraugster’s Fraud Free product which takes over the full liability for each transaction to ensure the retailer does not lose out if fraud does slip through.
Globally, online merchants lose more than than $30 billion to fraudulent transactions every year - roughly 1.5% of their revenue - and Fraugster is aiming to win them over by using its latest funding to expand into the US, Asia and Europe.
Stefan Tirtey, managing partner, CommerzVentures, says: “Fraud is a huge problem for e-commerce. Fraugster helps merchants to concentrate on selling, while reducing fraud and increasing conversion rates.”
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