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.
