Forter raises $300 million at $3 billion valuation
The announcement comes six months after the company completed its $125 million Series E round
E-commerce fraud prevention startup Forter announced on Tuesday that it has raised $300 million in Series F funding led by Tiger Global Management, with participation from Third Point Ventures, and Adage Capital Management. Existing investors also participated including Bessemer Venture Partners, Sequoia Capital, March Capital, NewView Capital, Salesforce Ventures, and Scale Venture Partners.
The announcement comes six months after the company completed its $125 million Series E round, almost tripling the valuation to $3 billion.
Forter will use the additional funding to continue expanding its global ecosystem of trust enabling retailers, e-commerce platforms, issuing banks, and payment providers to fight fraud together, boosting confidence and improving shopper experience across the entire purchasing journey. Over the last 12 months, Forter has doubled the size of its global network of merchants to exceed $250 billion in annual online transactions while protecting more than a billion shoppers globally.
Tiger Global Management is known as one of the most active high-volume funds and has a strategy that is reminiscent of that used by SoftBank in its first fund. It invests massive funds after a very quick due diligence process and acquires significant stakes in companies. Tiger has invested in the likes of Redis Labs, SentinelOne, and many others.
"The round began with Tiger Global which has stormed into our sector and checked which company it believes will go on to lead it," Forter co-founder Liron Damri told CTech. "Tiger checked everyone and decided that we will be the company that will lead this sector. A new investment round wasn't in our plans for now, but this was an excellent opportunity that will allow us to choose the timing for going public in the future and doesn't force us to do anything in the immediate future and being dependent on the ebb and flow of the market, and also gives us money to do much bigger things, like doubling our workforce in Israel to 400 employees."
The Israeli company was founded in 2013 by Alon Shemesh, Liron Damri, and Michael Reitblat. The company developed a cloud-based solution to prevent fraud in electronic trade and currently employs 300 people in total, 200 of them in Israel.
"We are a completely automated company processing over $250 billion in online commerce transactions. We don't have any one person who reviews the deals and decides if to accept or reject them. Our employees are busy upgrading our automated system and that also allows us to have fewer employees," added Damri. "For us, this is a dress rehearsal ahead of the IPO. We are in the process of building an organization that doesn't view being a unicorn as a target but wants to be a multi-billion company with a bright future."
Forter has processed over $250 billion in online commerce transactions, protecting more than a billion consumers globally from credit card fraud, account takeover, identity theft, and more. The company’s identity-based fraud prevention solution detects fraudulent activity in real-time, throughout all online consumer experiences.
Forter’s integrated fraud prevention platform is powered by its rapidly growing global network, underpinned by predictive fraud research and modeling, and the ability for customers to tailor the platform for their specific needs. As a result, Forter is trusted as the sole or primary risk mitigation engine by Fortune 500 companies including Farfetch, Sephora, Nordstrom, Instacart, Adobe, and Priceline.
Forter has raised more than $500 million of capital from top-tier VCs including Sequoia, Bessemer Venture Partners, NewView Capital, Tiger Global Management, Scale Venture Partners, March Capital, and Salesforce Ventures.
"We have set a new standard for trust in commerce. Forter’s platform brings together merchants, banks, and payment providers to dramatically improve authorization rates, eliminate false declines, and allow consumers to shop with greater convenience and enjoy a more personalized, secure experience,” said Michael Reitblat, CEO and co-founder of Forter.
While Forter has benefited tremendously from the industry trend towards digital transformation that resulted from pandemic effects, its unprecedented growth has also been driven by product innovation and new partnerships with leaders across banking, payments, and e-commerce. Earlier this year, Forter partnered with Capital One to launch Trusted Authorization, one of the first solutions enabling merchants to increase authorization rates and decrease false declines by sharing Forter’s fraud insights with issuing banks to make more informed decisions. The company also launched its Fraud Prevention Platform for Payment Service Providers (PSPs), announcing deals with FreedomPay, Nuvei, and most recently Flutterwave, to increase approval rates and offer the best fraud prevention to more than a million merchants globally.
“With the unprecedented rate of digital transformation and the fierce competition in creating the slickest user experience, superior fraud prevention plays an ever more critical role in e-commerce revenue growth," said John Curtius, Partner at Tiger Global Management. "After we talked with dozens of customers of every relevant solution in this space, it was very clear to us that Forter is the clear leader in performance and scale.”