- Payments and fraud prevention solutions provider Riskified announced recently that it raised $165 million in funding at a valuation of over $1 billion
Riskified — a payments and fraud prevention solutions provider — announced it has raised $165 million in Series E funding led by General Atlantic at a valuation of more than $1 billion. Existing investors Qumra Capital, Pitango Venture Capital, and Entrée Capital also joined the round. This round of funding will be used for rapidly scaling its business domestically and internationally along with expanding its product footprint.
The suite of solutions that are offered by Riskified operates at the intersection of merchants, banks, and consumers for optimizing the online and omnichannel paths-to-purchase. And the company’s artificial intelligence-powered fraud-prevention tools enable merchants to instantly and accurately distinguish legitimate customers from fraudulent ones and boost conversion rates.
Unlike scoring-based solutions, Riskified’s pioneering chargeback-guarantee model aligns the company’s incentives with merchants. As a result of Riskified’s accuracy, merchants increase sales, reduce the cost of fraud, and deliver better customer experiences. Plus Riskified’s solutions also increase bank authorization rates, protect customer accounts from misuse, and enable merchants to offer shoppers alternate payment methods.
“Riskified began as a new and unproven approach to fraud prevention and payments. Achieving success required merchants to believe in our vision and partner with us. Today’s announcement is a testament to those partnerships and the leadership position we attained in this important market,” said Riskified CEO and co-founder Eido Gal. “These funds will allow us to continue to develop innovative solutions that help move commerce forward.”
In terms of the numbers, Riskified customers typically see increased order approval rates up to 20% and see reductions in fraud-related costs up to 50%. And Riskified experienced hypergrowth of 250% CAGR over the past five years. Plus the company saw annual recurring revenue hit $100 million in 2018 and it is projected to increase by high double digits this year.
“Our work in the payments space has shown us that Riskified’s machine learning-based approach provides material improvements over legacy fraud and risk management solutions,” added Aaron Goldman, Managing Director and Co-Head of General Atlantic within the Financial Services sector. “We believe that the Riskified team is strategically positioned to continue capturing this substantial market opportunity.”
Currently, Riskified analyzes transactions from 235 countries and territories on all 7 continents. And the company has more than 420 employees in New York and Tel Aviv. The company is opening an office in Shanghai before the end of 2019.
“Riskified is the rare blend of realized performance and considerable potential. The company’s innovative model has enabled it to deliver significant ROI to its customers and partners, with a clear runway ahead for strategic expansion of its geographic footprint, product offering, and consumer base,” explained Tanzeen Syed, Managing Director of General Atlantic within Technology sector. “We are thrilled to partner with Eido and the Riskified team to reinvent the payments ecosystem and add real value for customers.”
Riskified currently works with some of the largest and most innovative merchants in eCommerce, from omnichannel retailers to digital-first merchants. And Riskified helps merchants grow their online businesses by enabling international sales, new product offerings, and seamless omnichannel flows all while providing the safety merchants require and the flexibility consumers need.
Goldman Sachs & Co. LLC. served as the sole placement agent in this round.