Israel’s FUGU raises seed round for online consumer fraud protection
The company helps merchants identify fraudulent payments online with machine learning at the post-purchase stage
FUGU, an Israeli startup that has launched a technology enabling trust between online businesses and their customers, has completed a seed round to help fund the fight against consumer fraud in online commerce. The amount, which is roughly $600,000, was led by an international venture fund and private investors.
FUGU uses machine learning technology to change the way that payments are made online. It provides online businesses with continuous and up-to-date information on the risks inherent to each transaction, allowing decision points such as cancellation before shipment, to occur. It does this by tracking the payment post-purchase to look for signs of fraud.
Amir Sadras, Founder and CEO at FUGU. Photo: FUGU
"The main point is that the entire system of payments ‘insures’ itself on top of the merchant's backs,” explained Amir Sadras, Founder and CEO at FUGU. “Therefore, they naturally defend themselves with overprotection that erodes sales. Our goal is to help them with our service, a unique method and the only one that protects the merchant from fraud committed by cardholders abusing consumer protection regulations. These scams have grown at a double-digit rate in recent years and have become a real nuisance."
Online payments and e-commerce services have practically exploded in the Covid-19 era, with numbers climbing 44% in the U.S in 2020. It is expected that the more time people spend online, the more chance that their transactions might be fraudulent or unsafe.
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One example of how fraud can be carried out is when a credit card holder orders a product or service but immediately denies it took place, filing a chargeback once the product has already been shipped by the merchant. Steps to prevent this such as online safety steps or security questions during the checkout often look suspicious to the everyday shopper and these measures can result in a 20% loss of transactions at the payment stage.
FUGU was founded by Sadras, a Technion graduate engineer. Its CTO, Nimrod Shory, is an entrepreneur and was previously CTO in Residence at Sarona Partners. The solution is available for installation on platforms like Shopify and Magento with customers in the U.S and Israel.
