Online merchants spend a lot of money on chargebacks, which are demands by credit card providers to reimburse for fraudulent charges. That’s why Signifyd created technology that assesses a transaction risk before the card is processed.
The San Jose-based company is raising $19 million in financing for its fraud protection services. Investors include Menlo Ventures, TriplePoint Capital and American Express Ventures.
Many e-commerce businesses do not have the resources to screen for risky transactions, so Signifyd’s financial guarantee has allowed them to secure clients like Jet.com, Lacoste, and Peet’s coffee. Signifyd says it has developed machine learning capabilities that are accurate enough for them to feel confident reimbursing the merchant on the rare occasions when its predictive technology is wrong.