Forter has received $3 million in Series A funding from Sequoia Capital. Based in Tel Aviv, Forter is a provider of fraud free ecommerce solutions for online retailers.
TEL AVIV, Israel, March 25, 2014 /PRNewswire/ — Forter, an Israeli-based startup that offers online retailers the first and only real-time anti ecommerce fraud solution that is backed with a full chargeback protection program, announced today that the company has closed a $3 million Series A funding round from Sequoia Capital, the Menlo Park, Calif.-based venture capital firm that also invested in Google, Apple and, more recently, WhatsApp, which was sold to Facebook for $19 billion.
“We’re thrilled to announce our funding round with Sequoia,” said Michael Reitblat, CEO of Forter. “Sequoia’s track record in helping to bring tech companies to market is very impressive – just look at WhatsApp — and their investment in Forter underscores our technology and its potential. As ecommerce continues to grow and fraud evolves, our one-of-kind technology is in a unique position to become the fraud solution standard for online retailers – big and small, and in any industry. By offering the only real-time anti ecommerce fraud solution that fully backs its decision making process, we’re filling a major void in the industry – we make a decision for 100 percent of the transactions so that merchants can focus on growing their businesses.”
The funding news comes one month after Forter’s launch, which was announced during the inaugural event for Citi’s Innovation Center in Tel Aviv, a worldwide fintech innovation center in which Forter spent the last eight months developing the technology.
According to eMarketer, an online retail analyst firm, ecommerce is growing at an astronomical pace – 15 percent, year-over-year. With the growth in ecommerce, fraud has become a larger and more complex issue, which is driven by international shoppers, new devices and legit consumers using privacy technology to hide their identity. Adding to the growth and complexity in ecommerce fraud is the recent retailer breaches, including Target’s.
“Since Target’s breach, where 40 million customers’ credit and debit card accounts were illegally accessed, retailers are increasingly looking for a solution that stops fraudsters without hurting good customers and losing revenue in real-time — to not affect the deal flow and user experience — all with a 100 percent guarantee, which is what we’re offering. Forter’s technology, in Target’s instance, would have made it extremely hard for fraudsters to monetize this data in the online space.”
Additionally, according to Reitblat, there is an October 2015 deadline for credit card companies to insert chips and PINs in cards, which will make it harder for fraudsters to monetize the breached data in the physical stores. As credit card companies begin complying, the industry will likely see increase in online fraud.
Forter’s plug-and-play technology automates the review process by instantly analyzing profile data, behavioral data and cyber intelligence. While other solutions are solely focusing on verifying customer-given information, which is easy to fake, Forter focuses on combining that with the analysis of real-time customer behavior on the site – something that is much harder to fake.
Behavioral data and cyber intelligence were practices the founders learned as intelligence officers in the Israeli Defense Force and mastered at Fraud Sciences, a company that they helped develop, which delivered fraud decision coverage protection. Fraud Science was acquired by – and integrated into – PayPal in 2008 for $169 million. PayPal was also funded by Sequoia.
“We believe Forter has great potential to become a big company,” said Shmil Levy, Partner at Sequoia. “The company’s technology is innovative and the team is exceptional. There is no other technology in the ecommerce space that provides merchants with a solution that prevents their businesses from being hurt by fraud. We are proud to have Forter as part of our portfolio.”
Based in Tel Aviv, Forter offers online retailers a plug-and-play technology that enables fraud-free ecommerce. Founded by the executive team of Fraud Sciences, a company that delivered fraud decisions with coverage protection before being acquired by – and integrated into – PayPal in 2008 for $169 million, Forter’s plug-and-play technology is able to accurately decline fraudsters and/or approve consumers, in real time, with a 100 percent chargeback guarantee. It saves online merchants time and money, unlocks untapped opportunities and enhances their customers’ experience. For more information, visit www.forter.com.