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New York welcomes new resident ecommerce fraud prevention startup Trustev to open Big Apple office in Q1 2014

E‑commerce man­agers in New York are set to have a new and wel­come res­i­dent dur­ing Q1 2014 when the Irish e‑commerce fraud pre­ven­tion firm Trustev opens a new office there. The move is thanks to a sec­ond round of seed fund­ing for the fledg­ling firm total­ing $500,000.

The lat­est invest­ment comes on top of a $3million seed round which the start­up bagged in Octo­ber last year, bring­ing its total fund­ing to a hand­some $3.8 mil­lion (it raised $300,000 in angel invest­ment back in February).

Tack­ling fraud effec­tive­ly 

But intre­pid e‑commerce man­agers will want to know a lit­tle more about why this Cork-based new­bie is attract­ing such hefty fund­ing. Blame the spec­tac­u­lar rise in ecom­merce: glob­al ecom­merce sales topped $1 tril­lion in 2012 and did even bet­ter ($1.3 tril­lion) in 2013. But with spec­tac­u­lar suc­cess has come a dark side: you don’t have to be a sea­soned e‑commerce man­ag­er to know that the indus­try has had to do bat­tle with the ever-present threat of fraud.

Fraud, says the company’s founder and CEO Pat Phe­lan, is a $20 bil­lion-a-year prob­lem and it’s grow­ing at twice the rate of the legit­i­mate e‑commerce mar­ket. And the industry’s stan­dard approach – human vet­ting – sim­ply isn’t up to the task of com­bat­ing this threat.

That’s where Trustev’s algo­rith­mic sys­tem for ana­lyz­ing social sig­nals, trans­ac­tion his­to­ry and behav­ioral data comes in. It allows e‑commerce com­pa­nies to build up a “dig­i­tal fin­ger­print” enabling them to ver­i­fy that online shop­pers real­ly are who they say they are.

A new step 

Phe­lan says that his firm now has in excess of 60 cus­tomers, amongst them some very big glob­al car­ri­ers. But for obvi­ous rea­sons, they’re reluc­tant to be pub­licly named. As job­bing e‑commerce man­agers will be aware, declar­ing that you’re bat­tling fraud may put the fright­en­ers on poten­tial cus­tomers rather than reas­sur­ing them that you’re active­ly deal­ing with the problem.

Some of the new fund­ing will pave the way to a new devel­op­ment in addi­tion to Trustev’s iden­ti­ty ver­i­fi­ca­tion and fraud alert­ing tech­nol­o­gy. As Phe­lan explains.

“We will move into pay­ment guar­an­tee in QTR 2 where we take all the risk and allow mer­chants to trade glob­al­ly with­out the fear of fraud.”

It’s inge­nious inno­va­tion like that which led to Trustev being named Europe’s Top Start­up of 2013 in a Euro­pean Com­mis­sion-backed com­pe­ti­tion last summer.

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