Wipro Ltd. Chairman Azim Premji is backing another U.S. startup, leading a $100 million round in e-commerce fraud-prevention company Signifyd.
The Indian tech titan’s personal investing vehicle Premji Invest led the deal, valuing the seven-year-old company at roughly $400 million, according to a person with knowledge of the deal, who asked to remain anonymous because the details are private.
The cash infusion is the latest in a line of similar late-stage bets by the fund, including business software companies Apttus Corp. and Anaplan Inc. It also marks a major inflection point for Signifyd Inc. which aims to help e-commerce sites stem fraud and reduce the number of legitimate transactions that are improperly declined.
The San Jose, California-based company plans to double its staff to 320 and open an office in Barcelona during the next year, Co-Founder and Chief Executive Officer Raj Ramanand said.
Like competitors Forter Inc., Riskified Ltd. and others, Signifyd makes software that analyzes online transactions for fraud. It pulls in additional data, including the length of time an email address has been in use, the number of social media contacts connected to a potential customer and the type of device being used. It then uses that information to identify potential shysters and green-light ones that don’t fit a standard profile, but that Signifyd still deems as legitimate.
For example, one bicycle seller was declining roughly 30% of its transactions because the billing and shipping addresses didn’t match, Ramanand said. Upon further analysis of timing (almost all the purchases in question were made in August and September), home values and the like, Signifyd determined these were mostly parents purchasing bikes for their kids starting college. The company’s software approved the transactions and the bike shop recouped revenue, he said.
E-commerce fraud is a growing problem, but Signifyd thinks it has a solution to save businesses money.
Their company is growing fast and has closed a $56 million Series C investment led by Bain Capital Ventures. Menlo Ventures and American Express also participated in the round.
Signifyd counts big clients like Jet.com, Peet’s Coffee and Lacoste, where it uses its pattern recognition technology to warn them upfront about potential fraudulent charges. Signifyd is so confident in its assessments that it offers the companies a guarantee, so they don’t have to pay for errors.
The product “protects the merchants so they don’t have to bear the liability,” said co-founder and CEO Rajesh Ramanand. The team has been developing a “machine learning platform that makes these decision in real-time.”