December 20, 2013
Tel Aviv startup Riskified, was co-founded in 2012 by Assaf Feldman (CTO) and Eido Gal (CEO). In July 2013, the company received a funding of $1.6 Mn through investors Genesis Partners, Formation 8, Founder Collective, The Accelerator Group, T5 Capital and Entrée Capital. The company employs 10-15 persons.
According to a report from Visa, merchants globally are declining 5% of all transactions due to fear of fraud. Riskified’s independent study found that 80% of the supposedly high-risk orders are from legitimate customers who appear high risk to typical fraud detection systems and are blocked by them.
Riskified uses proxy detection, device finger printing, data enrichment through the social graph and entity linkage to classify transactions. If someone has an IP location in France, a credit card in the U.K. and they are shipping to New York, this might be a red flag, but it could be a legitimate sale to someone who used to live in the U.K., now lives in France and is spending some time in the U.S., said Eido Gal. We read the full story.
Riskified appealed our firm, in part, because it was tackling the old problem of merchant fraud online from a new angle, said Eyal Kishon founder, Genesis Partners. I have been declined many times when trying to buy something online from the U.S., simply because I am from Israel, Riskified asks, ‘What are we missing? What should we not be declining?’
Some of the other companies operating in this space include large security providers such as RSA and younger tech ventures like Signifyd, Sift Science and ThreatMetrix. Riskified processes all international transactions for some merchants. They are wrong about whether a charge is fraudulent 1 out of 1000 times according to Eido Gal. For some other merchants, the company processes only their highest risk order – here they are wrong around 1 out of 200 times.