These 10 fraud-prevention startups are helping companies like Airbnb, Fiverr, and OkCupid fight everything from money laundering to catfishing — and nabbing a wave of VC cash in the process

clicks | 12 days ago | comments: discuss | tags: cryptocurrency

Article preview (bot search)

(Original link:

Two crossed lines that form an 'X'. It indicates a way to close an interaction, or dismiss a notification. Crystal Cox / Business Insider This story requires our BI Prime membership. To read the full article, simply click here to claim your deal and get access to all exclusive Business Insider PRIME content. As the way we pay becomes increasingly digital, fraudsters are targeting sites like Airbnb, Fiverr, and OkCupid. A new wave of startups has entered the scene, providing fraud prevention software to e-commerce retailers, online dating sites, lenders, and other marketplaces. Here's a look at 10 startups that provide fraud prevention for both new and incumbent players, including how much VC cash they've raised and who some of their clients are. Click here for more BI Prime stories .
Fraud isn't a new issue for merchants and banks.
But the way we pay for things and move our money around is changing. And as our financial lives become increasingly digital, the fraud risks get harder to manage — especially for new startups who don't have the legacy risk and compliance infrastructure of a Wall Street bank.
But those legacy players were also used to a world where static rules could be written to identify fraud — like a payment made in a foreign country, or an ATM withdrawal that breaches an average threshold.
Today, fraudsters are deploying more intricate tactics, so any company dealing with money and payments needs to stay on its toes.
To help companies keep up with the speed and complexity of digital payments, a new cohort of startups has arrived, and they're offering fraud prevention services to both newcomers and incumbents.
From identity verification on dating sites to anti-money laundering AI for international e-commerce brands, these startups use data, machine learning, and automated intelligence to provide more than just rules-based fraud monitoring.
Here's a look at 10 startups making sure that as our financial lives get more digital, our information isn't at risk. Cognito
Total raised : $2.1 million
Last round : $2.1 million seed in August 2014
Key investors : Lightspeed Venture Partners (Affirm, Grubhub, Snap), Khosla Ventures (Affirm, DoorDash, Impossible Foods), Y Combinator (Airbnb, Dropbox, Stripe)
Clients : Brex, Coinbase, Nextdoor
Cognito is an identity verification service used by businesses to perform "know your client," often referred to as KYC, validation when onboarding new users.
Cognito can verify users' personal information to help businesses prevent fraud. To sell age-restricted items online, for example, a business can use Cognito's software to verify a user's date of birth.
In addition to its consumer identity verification product, the Palo Alto-based startup is also developing a business verification product which applies the same data validation principles to businesses. Cybertonica
Total raised : $3 million
Last round : £2 million Series A in January 2020
Key investors : Digital Space Ventures (Capitalise, Revolut, Tandem), Force Over Mass Capital (Airportr, Drover, Vidsy), Truesight Ventures (Octi, QuickBus, Steadypay)
Clients : AWS, Cisco, EPAM
Cybertonica offers three fraud prevention products to payments processors and businesses: Anomalytics, payments fraud detection software; ScreenWiZe, a mobile transaction fraud detection platform; and GoFrictionless, a one-click customer verification software for online merchants.
The London-based startup offers its products to payments players like banks, e-commerce companies, and merchant acquirers (financial institutions that maintain a merchant's account to accept payments). Elliptic provides risk management software for crypto. Reuters
Total raised : $35 million
Last round : $23 million Series B in September 2019
Key investors : Digital Currency Group (Cognito, Coinbase, Ripple), Octopus Ventures (Conversocial, Depop, Patch), Santander InnoVentures (Kabbage, Trulioo, Socure)
Clients : Silvergate Bank
Elliptic provides risk management and anti-money laundering software for cryptocurrency to banks, crypto exchanges, and regulators. Its software can help identify fraudulent accounts, links to dark web marketplaces, and money that may be tied to theft.
Founded in 2013, the London-based startup hopes to bring crypto to the banks, who often won't trade on crypto exchanges, where they feel they can't manage risk. Elliptic provides banks with insight into the licences and KYC policies of crypto exchanges and the transactions happening on that exchange that may be in sanctioned countries. FeedZai
Total raised : $77.5 million
Last round : $50 million Series C in October 2017
Key investors : Citi Ventures (Honey, Plaid, Trulioo), Data Collective (Gusto, LendUp, Tala), Sapphire Ventures (23andMe, LinkedIn, Square)
Clients : Citi, Credorax, SafetyPay
FeedZai offers AI-powered fraud prevention services to banks, acquirers, and merchants. Its products include account opening, anti-money laundering, and transaction monitoring.
FeedZai was initially l...