ThreatMetrix, a provider of fraud prevention solutions, today announced that it has secured $12.1 million in financing in a Series C round.
The Los Altos, California based company’s online fraud-management software helps companies such as financial services, e-commerce, travel, ticketing, Web 2.0 and payment providers accomplish tasks such as verifying new accounts, authorizing payments and transactions and authenticating user logins in real-time without relying on personally identifiable information (PII).
Using a software-as-a-service (SaaS) approach, ThreatMetrix profiles the device used in an online transaction to help companies determine whether the users are fraudsters or customers. ThreatMetrix device profiling goes beyond browser fingerprinting to identify the device, bypass proxies and detect the use of botnets. Implementation enables companies to get results in hours or days, rather than weeks or months and pricing starts around $1,000 per month.
Internet fraud is a significant and a growing problem on a global scale. According to CyberSource’s 11th Annual Fraud Report, Internet retailers lost more than $3.3 billion to fraud last year.
“The multi-billion dollar IT security industry continues to rapidly expand due to the growing wave of global cybercrime,” said Ben Boyer, managing director, Tenaya Capital. “The principal highway for today’s cybercriminals is the Internet where a fraudster using a stolen or synthetic identity can easily compromise bank accounts, Internet retailers, and members on social networking sites,” Boyer added.
“Over the course of the last 18 months we’ve brought on board over 250 customers who use our ThreatMetrix Fraud Network to stop online fraud to verify new accounts, authorize card-not-present payments and authenticate user logins. We anticipate using the funding for general operating capital, expansion of our product offering, and sales and marketing,” said Reed Taussig, president and CEO, ThreatMetrix.
The round was led by Tenaya Capital (formerly Lehman Brothers Ventures) and existing investors including U.S. Venture Partners, CM Capital and TVP, also participated in the round. ThreatMetrix closed a $6.1 million B round of funding in September, 2009 and received $7 million in a Series A round led by CM Capital and Technology Venture Partners.
Implementing anti-fraud technologies is becoming critical for online businesses and the market has recognized the need for technologies to thwart cybercrime. In August, CA Technologies announced it would acquire privately-held Arcot Systems, Inc., a provider of authentication and fraud prevention solutions for $200 million in cash.