Cloud-based identity verification and fraud prevention startup Socure today closed a $35 million round. CEO Tom Thimot told VentureBeat the funds will bolster Socure’s R&D efforts and help it expand its customer base.
Javelin Strategy reported that 6.64% of consumers — or about 16.7 million people — fell victim to identity fraud in 2017, up 1 million from 2016. In 2018, over 2.6 billion records were stolen or exposed in more than 1,100 data breaches around the world. And the pandemic has only made things worse — Socure’s first official fraud report this year shows a 134% increase in attempts since March.
But eight-year-old Socure is working to turn the tide. Its digital ID verification suite leverages machine learning and predictive analytics techniques to authenticate people from “thousands” of email, phone, address, social media, and IP data points from over 310 sources. Socure tabulates “trust scores” for people in less than a second and explains in detail how it came to its conclusions.
Socure’s latest offering features a modular design and new anti-money laundering capabilities — along with an optional document verification component that can validate the authenticity of physical IDs — in a single API. That makes it ideal for lenders, ecommerce companies, retailers, and others that deal with potentially risky or “thin-file” clients, says Thimot.
Socure recently released the third generation of its platform, which introduced a fraud score and document verification with liveness detection and heterogeneous data aggregation. In June, the startup launched Intelligent KYC, which incorporates data sources, graph analytics, and machine learning to produce new insights.
Thimot says the company has launched several products in direct response to an uptick in fraud activity. Socure’s report found that fraudulent credit card applications were up 93% between March and April. Between March and late June, attempted money transfer fraud increased 43% as challenger banks experienced a 200% climb in attempted demand deposit account fraud.
Socure’s clients include four of the top five U.S. banks and eight of the top 10 credit card issuers, as well as Varo, Chime, and Stash. Socure claims customers see average reductions in fraud rate and manual review costs of 80% and 90%, respectively, and an up to 40% decrease in ID authentication failures involving millennials.
Sorenson Ventures led this latest equity investment, with participation from backers Commerce Ventures, Scale Venture Partners, and Flint Capital, alongside strategic investors Citi Ventures, Wells Fargo Strategic Capital, and MVB Financial. The round brings New York-based Socure’s total funding to $96 million, following a $30 million round in February 2019.
Author: Kyle Wiggers.
Source: Venturebeat
