While using increase of digital transacting over the past year, cybercriminals have always been having a field day.
To 2020, complaints of diagnosed internet crime surged when 61%, to 791, 790, according to the FBI’s 2020 Internet Crime Report . Those crimes — ranging from personal and corporate data breaches to credit card fraud, phishing and identity theft — cost victims more than $4.2 billion.
For companies like Sift — which aims to predict and prevent fraud online even more quickly than cybercriminals adopt new tactics — that increase in crime also led to an increase in business.
Last year, the San Francisco-based company assessed risk on more than $250 billion in transactions, double from what it did in 2019. The company has over several hundred customers, including Twitter, Airbnb, Twilio, DoorDash, Wayfair and McDonald’s, as well a global data network of 70 billion events per month.
To meet the surge in demand, Sift said today it has raised $50 million in a funding round that values the company at over $1 billion. Insight Partners led the financing, which included participation from Union Square Ventures and Stripes.
While the company would not reveal hard revenue figures, President and CEO Marc Olesen said that business has tripled since he joined the company in June 2018. Sift was founded out of Y Combinator in 2011, and has raised a total of $157 million over its lifetime.
The company’s “Digital Trust & Safety” platform aims to help merchants not only fight all types of internet fraud and abuse, but to also “reduce friction” for legitimate customers. There’s a fine line apparently between looking out for a merchant and upsetting a customer who is legitimately trying to conduct a transaction.
Sift uses machine learning and artificial intelligence to automatically surmise whether an attempted transaction or interaction with a business online is authentic or potentially problematic.
One of the things the company has discovered is that fraudsters are often not working alone.
“Fraud vectors are no longer siloed. They are highly innovative and often working in concert,” Olesen said. “We’ve uncovered a number of fraud rings.”
Olesen shared a couple of examples of how the company thwarted fraud incidents last year. One recently involved money laundering through donation sites where fraudsters tested stolen debit and credit cards through fake donation sites at guest checkout.
“By making small donations to themselves, they laundered that money and at the same tested the validity of the stolen cards so they could use it on another site with significantly higher purchases,” he said.
In another case, the company uncovered fraudsters using < a href="https://blog.sift.com/2021/telegram-fraud-scheme/"> Telegram , a social media portal, to make services available, equivalent to food delivery, with taken credentials.
The data that Sort has accumulated since its start helps the company “act currently being the central nervous system for fraud clubs. ” Sift says that its models become more good with every customer that it harmonizes with.
Insight Partners Managing Representative Jeff Lieberman, who is a complete Sift board member, told his firm initially procured Sift in 2016 a large number of even at that time, it was open up that online fraud seemed to be to “rapidly growing. ” It was subsequently growing not just in amount of money amounts, he said, but in the number of methods cybercriminals utilized steal from consumers furthermore businesses.
“ Sift has a novel treating fighting fraud that combines massive data sets utilizing machine learning, and it has every track record of proving its gain for hundreds of online businesses, ” he wrote via send me an email.
When Olesen and the Look team started the new process of fundraising, Insight also approached them before some people started talking to outside should be “because both the product since business fundamentals are so long lasting, and the growth opportunity within the massive, ” Lieberman contributed.
“With more businesses to a great extent investing in online channels, nearly every one of them needs a solution activities intelligently weed out fraud long time ensuring a seamless knowledge for the 99% of connections or actions that are real, ” he wrote.
The company plans to use for new capital primarily which will expand its product simple steps and to scale its solution or service, engineering and sales provide.
Sift also recently drawn on Eu-Gene Sung — who’s got worked in financial leadership figures at Integral Ad Modern technology, BSE Global and McCann — to serve as this CFO.
As to whether or not which will meant an IPO is at Sift’s future, Olesen explained that Sung’s experience of taking organisations through a growth phase as in what Sift is getting would be valuable. The company could for the first time looking to potentially make M& A.
“When good about expanding our some sort of, it’s really a buy/build lady approach, ” Olesen mentioned.