AI-based fraud detection firm Feedzai has landed a $200m round of funding with a valuation of over $1bn.
Led by investment firm KKR, the round also had participation from past investors Sapphire Ventures and strategic backer Citi Ventures.
Feedzai said it will be using the funds for further R&D and product development, expand into more markets outside the US and towards business development, specifically via partnerships to integrate and sell its tools. Furthermore, Feedzai will use the capital to further enhance its detection capabilities.
This latest round comes four years after Feedzai raised a $50m Series C round. With the new round, the total funding raised comes to $182m to date.
The firm which was originally founded in Portugal but now is based out of San Mateo, offers a fraud detention platform that helps financial institutions and companies prevent illicit transactions from going through their systems.
As opposed to using traditional fraud detection tools, Feedzai replaces manually defined rules with AI algorithms that captures a broader range of threats with greater reliability.
The startup claims its algorithms in some cases take less than three milliseconds to determine if a transaction should be approved or not. For cases which require a more in-depth investigation, Feedzai offers tools that enable analysts to identify relationships between individual transactions, credit cards and other entities.
Its clientele using its technology to analyse their transactions which comprise 80% of the world’s Fortune 500 firms have a total of about 800 million customers worldwide. Additionally, the firm also services four of the five largest banks in North America, 154 million individual and business taxpayers in the US and has processed $9bn worth in online transactions for two of the world’s most valuable athletic brands.
In addition to Citibank, its customers include Fiserv, Santander, SoFi and Standard Chartered’s Mox.
Commenting on the firm’s features, chief executive Nuno Sebastiao said, “Feedzai’s customers will see an accelerated product roadmap that includes a full end-to-end financial crime and risk management solution.” He detailed that Feedzai will continue to build more extensive integrations with the other platforms that its enterprise clients use to support their financial operations.
“The world has faster digitisation requirements and financial institutions need reliable solutions that thrive in this new digital environment in days, not months,” Sebastiao said.
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