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Riskified, an Israeli-based fintech security startup, is seeking to raise as much as $200 million to ramp up expansion amid the explosive growth of the e-commerce fraud, Bloomberg News reports.
Riskified uses machine learning to detect fraudulent orders for clients such as Prada and Gucci. The company already raised $64 million from investors, including Groupe Arnaut, the investment company of the chairman and chief executive officer of LVMH. The fresh funds would be used for the expansion of the TelAviv-based startup that may consider an initial public offering by next year, Bloomberg reports.
The company spokesperson declined to comment, Bloomberg says.
As e-commerce continues to boom, fraud has followed suit. According to a survey conducted by Riskified in January, nearly 50 percent of consumers have experienced credit card fraud, and 45 percent of respondents said they’ve abandoned the retailer after the incident. Global retailers, who have been notoriously slow to adopt new security technologies, may lose as much as $130 billion in the next five years, as the “complex cross-channel fraud will become ‘the new normal,’” according to a Juniper Research report.
Online payment fraud is fueled by account takeovers, automated high volume bot attacks as well as identity stolen through data breaches. Like competitors Forter Inc., Signifyd Inc. and others, Riskified makes software that analyzes online transactions, detects suspicious behaviour and helps reject transactions from stolen credit cards. The company also offers a “chargeback guarantee” -- merchants get reimbursed for transactions that were wrongly approved.
Founded in 2012 by Eido Gal and Assaf Feldman, the company more than quadrupled its annual revenue in each of the last two years and plans to grow its staff from 280 to 500 people in 2019, the Jerusalem Post reported in October.
Bloomberg says that investor appetite in Israeli startup has been growing steadily in the past three years: funding increased 37 percent to $856 million last year, according to data compiled by Start-Up Nation Central, a non-profit that tracks Israel’s technology industry.
Anastasia Ustinova is a freelance business writer based in Seattle with more than 10 years of experience reporting around the world. Her stories were featured in Bloomberg News, Businessweek, the San Francisco Chronicle and the Houston Chronicle.