nSure.ai raises $6.8 million in Seed to develop AI fraud prevention for digital goods space
The funds will go towards further developing the Israeli startup’s predictive AI and machine learning algorithms that have reduced decline rates from an industry standard of 20% to only 2%
nSure.ai, a predictive AI fraud protection company focused on digital goods retailers, announced on Monday a Seed fundraising round of $6.8 million, led by Disruptive AI, Phoenix Insurance, Kamet – an AXA backed venture builder, Moneta Seeds, and private investors.
Transactions for non-physical products are processed and delivered in seconds, making accurate fraud detection even more critical as sellers scale the sale of digital goods. These digital goods include gift cards, top-up & prepaid debit cards, software and game keys, digital wallet transfers, international money transfers, tickets, and more. Sellers of physical goods have warehouse processing times to double-check charges and can withhold a shipment if needed. Digital sellers lack this buffer, so even if fraud is detected minutes later, the assailant is untraceable, leaving sellers to absorb hefty chargeback fees.
nSure.ai co-founders Alex Zeltcer (left) and Ziv Isaiah. Photo: nSure.ai
Before founding the company in 2019, founders Alex Zeltcer and Ziv Isaiah experienced first-hand the unique challenges faced by retailers of digital assets. During the first week of operating their online gift card business, 40% of sales were fraudulent, resulting in chargebacks. They turned to leading fraud detection solutions from the physical goods space but soon realized that they did not meet their needs. This led them to develop a platform that focuses specifically on supporting the under-served digital goods sector.
The nSure.ai solution currently monitors and manages millions of transactions every month, and has approved close to $1 billion in volume since going live.
“We are thrilled that our investors have placed their trust in our leadership and confidence in nSure.ai,” said Alex Zeltcer, co-founder and CEO. “This investment enables us to register thousands of new merchants, who can feel confident selling higher-risk digital goods, without accepting fraud as a part of business.”
Today’s industry benchmark declines approximately 15%-20% of transactions. according to Zeltcer, with accurate proven AI and a deep industry understanding, nSure.ai’s 98% approval rate reflects a more accurate fraud-detection strategy, allowing retailers to recapture nearly $100 billion a year in revenue lost by declining legitimate customers.
“We believe that fraud, especially in the booming field of digital goods, can only be fought with top-of-the-line AI technologies,” said Gadi Tirosh, Venture Partner at Disruptive AI. “nSure.ai has both the technology and industry understanding to win this market.”