The funding was led by Earlybird and existing investors like Speedinvest, Seedcamp and an unnamed large Swiss family office, according to TechCrunch. The funds will be used to add to Fraugster’s headcount as it expands internationally.
The startup was founded in 2014 by Max Laemmle, Better Payment co-founder, and Chen Zamir, who has spent more than a decade in different analytics and risk management roles including five years at PayPal.
Fraugster has developed an AI-powered fraud detection technology that learns from each transaction in real-time and claims to be able to anticipate fraudulent attacks even before they happen. The result is that the startup can reduce fraud by 70 % while increasing conversion rates by as much as 35 %.
Once integrated, Fraugster starts collecting transaction data points such as name, email address, and billing and shipping address. 2,000 extra data points, such as an IP latency check to measure the real distance from the user, IP connection type, distance between key strokes, and email name match are added to those initial transaction data points. In the end, the enriched dataset is sent to the AI engine for analysis.
Fraugster cites competitors as incumbent enterprise level companies like FICO or SAS, which it claims are based on outdated technology, the online publication continues.
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