White Ops, a provider of online fraud detection solutions, said Tuesday that it has closed $7 million in funding. The investors were Paladin Capital Group and Grotech Ventures. In addition to the funding, Philip Eliot of Paladin and Steve Frederick of Grotech will join the White Ops’ board of directors.
NEW YORK, NY—June 24, 2014—White Ops, a pioneer in online fraud detection, today announced that it has secured $7 million in investment from new investors Paladin Capital Group and Grotech Ventures. Joining the White Ops Board of Directors are Philip Eliot from Paladin and Steve Fredrick from Grotech. Fueling White Ops’ ability to extend its leadership in combating online advertising fraud, the growth capital will also help to fund the expansion of White Ops’ bot detection innovations into enterprise customers to combat other forms of bot-driven crime such as man-in-the-browser financial fraud, e-commerce fraud and automated attacks on websites such as Distributed Denial of Service (DDoS).
A recent study found that corporations suffer bot infections at least once every 24 hours. Moreover, the percentage of organizations with active bot infections increased to 73 percent from 63 percent year-over-year. The same study noted that 77 percent of the bots were active, yet undetected for more than a month. The ability for bots to hide in plain sight and convincingly mimic user behavior, is a key reason for the success of multiple major criminal markets. The most profitable of these is online ad fraud. Industry experts estimate that at least 22 percent of digital display advertising traffic worldwide is driven by bots, resulting in an estimated $6-10 billion in losses each year.
“For the past seven years, Paladin has actively tracked and invested in security solutions that address automated attacks,” said Eliot. “The security pedigree of the White Ops team has enabled the company to take this fundamental business problem existing across multiple markets and develop a way not only to stop the threat but halt its continued evolution. The initial application of the White Ops solution to the ad fraud industry is unique. Unlike traditional security where missing a single infection can be as damaging as missing 50 percent of the infections, the ad fraud market sees incremental value for incremental gain. A reduction of fraud by 10 percent results in a savings of 10 percent—this is a compelling ROI for customers.”
White Ops was founded by a team of formidable cybersecurity, science, media and big data experts, including CEO Michael Tiffany, Chief Scientist Dan Kaminsky, CTO Tamer Hassan and General Counsel Ash Kalb. The company’s goal is not to create a security company to solve the latest problem but to address fundamental flaws in how security and online business are conducted at a foundational level, changing the business proposition for criminal entities.
“At Grotech, we seek out companies that have the potential to make a massive impact,” said Fredrick. “The founders of White Ops are well known for the considerable positive effect they’ve had—and continue to have—on the security industry. In a very short time, they’ve developed the ‘Go-To’ solution for ad industry players to combat fraud, while becoming an authoritative voice and an integral resource for setting direction in the advertising industry as a whole. This combination of influence and innovation enables the company to fundamentally change the game in online fraud.”
White Ops offers the world’s first systematic solution for accurately isolating and eliminating bot-infected traffic. By applying the techniques of Side Channel Analysis across thousands of real-time user session variables, White Ops differentiates between a human and machine-driven request—regardless of the sophistication of the bot programmer and across the full spectrum of impression and click fraud techniques. This approach is vastly more effective than methods generally employed by legacy fraud detection services, which rely largely on historical data and statistical and predictive analysis to detect bot activity.
The White Ops solution is frictionless, invisible and massively scalable in distinguishing a bot from a human. It can immediately categorize it even if the bot is behaving in a way never before seen, providing in-depth analysis to the customer, while depriving malicious operators of valuable intelligence as to how they failed or were detected. This, in turn, shuts down the botnet operators’ ability to adapt and evade, substantially raising the cost and effort when attempting further attacks.
“White Ops isn’t about building a better mousetrap, it’s about removing the need for traps by never letting the mice get the cheese,” said Michael Tiffany, CEO of White Ops. “The goal of our innovation is to be invisible to the customers’ business operations and the bad guys alike, while having visibility at a massive scale to better understand the attacker and continually inform our approach. Malicious attackers know that if they can figure out how to evade the traps, they can get what they want. White Ops identifies them by their behavior and then starves them of their prize, making it not only difficult to adapt, but ultimately cost prohibitive to exist.”
About Paladin Capital Group
Paladin Capital Group is a leading multi-stage private equity firm comprised of individuals with a proven track record of financial expertise and national security experience. Paladin is an experienced investor in cyber security technologies and solutions worldwide having completed 34 cyber investments over the last decade. Paladin provides capital and strategic guidance to growing companies in the IT and telecommunications sectors. The firm focuses on companies with products and services that are “dual use” in nature, serving both commercial and government customers.
Paladin has over $950 million dollars of committed capital across multiple funds and has invested in over 60 portfolio companies. For more information, visit www.paladincapgroup.com.
Founded in 1984 and investing out of its eighth fund, Grotech Ventures is a leading early investor in high-potential technology companies. Grotech seeks innovative IT companies with particular emphasis on digital and social media; software and SaaS; security and storage technologies; healthcare information technology; and communications technology and services. Grotech continues to invest and add value throughout the growth of its portfolio companies. The firm has a strong combination of industry relationships and deep domain and operational expertise to accelerate growth. Grotech supports early-stage companies through investments starting at $500,000.
About White Ops
White Ops is a pioneer in the detection of and systematic defense against bot and malware fraud, providing advertisers and enterprise businesses with the tools they need to eliminate fraud, raise their bottom lines and ensure the success of their campaigns and the security of their systems and data. White Ops’ leading-edge technology combats criminal activity in a significantly different and more comprehensive way than any method currently on the market. White Ops differentiates between bot and human interaction in online advertising and publishing, enterprise business networks, e-commerce transactions, financial systems and more, allowing clients to remove and prevent fraudulent traffic and activity. By working with clients to cut off sources of bad traffic, White Ops makes bot and malware fraud unprofitable and unsustainable for the cyber criminals who ultimately profit from it¾an economic strategy that will eventually eradicate this type of fraud. On the Web at www.whiteops.com.