Signifyd, a standalone risk and fraud prevention platform, announced today it has raised $2 million in financing from Andreessen Horowitz, Data Collective, IA Ventures, QED Investors, Resolute.VC, Tekton Ventures and other angel investors. The company plans to use the funds to expand its engineering team and accelerate product development.
Signifyd was founded in 2011 by a team of risk experts from PayPal to address the complexity of payment validation. Between chargebacks, mistakenly declined orders, and countermeasure costs, the average e-commerce retailer loses 3.1% to fraud every year. Most large e-commerce merchants have teams of agents that arduously try to bridge the gap between the online identity a user presents and the real-life person he claims to be.
"The techniques used by fraudsters are evolving faster than the existing prevention tools. A merchant whose real job is to market and sell goods, has to become an expert on device fingerprinting, IP Geo-Location, NAP Checks, BIN lookups, social spoofing, etc. And then that merchant has to integrate all these services. It's crazy," said Raj Ramanand, co-founder and CEO of Signifyd. "Signifyd abstracts all of that away. We pull together all the data needed to screen a transaction and look at the identities involved holistically. With Signifyd, you get a one-stop solution, from automated scoring to manual review, even if you do not have any prior internal history on the customer."
Since launch, Signifyd has processed millions of events from its Beta customers, which include Fortune 100 companies and leading e-commerce sites. "We're seeing great results from our Beta customers. We've cut the amount of time spent on manually reviewing transactions by 60% in some cases while increasing catch rate by 20% or more," said Michael Liberty, the co-founder of Signifyd. "In particular, we're seeing huge lifts in chargeback detection as well as reduced declines as a result of our social profile data, which is something no other fraud vendor offers." The Signifyd platform works across verticals, with signatures of typical customer behavior in travel, digital goods, premium merchandise, and shipping. Trials are also underway with collaborative consumption marketplaces where trust between buyers and sellers is critically important to adoption.
"What drew us to Signifyd is a proven team tackling a massive pain point. E-Commerce companies can't waste time and resources cobbling together internal fraud solutions. The need for a comprehensive fraud prevention platform is apparent," said Mike Hirshland of Resolute.VC, who led the round. "We are delighted to partner with Signifyd as they battle fraud head-on."
"We're honored to partner with a great set of investors that understand risk and big data businesses," said Ramanand. "Mike Hirshland was an early investor in Automattic; Nigel Morris co-founded and built Capital One into a financial giant; Scott Weiss backed SilverTail Systems and IA Ventures has an entire fund focused on companies creating a competitive advantage through data. The whole group is made up of people who understand how to build a company like ours."