E-retailers must focus on their specific goals and examine a vendor’s reputation and market expertise, not referrals.
The startup helps e-retailers verify, approve and guarantee high-risk transactions.
Startup risk management vendor Riskified this week announced it has closed a $1.65 million seed funding round.
Genesis Capital Partners LLC led the funding round with Formation 8 Partners LLC, Founder Collective, Entree Capital, The Accelerator Group LLC and T5 Capital also participating.
Riskified aims to reduce the number of transactions that online retailers decline. It uses a variety of technologies, such as device fingerprinting—that traces the transaction history of the device being used to initiate the transaction—to review, approve and guarantee high-risk transactions for online retailers. Merchants can select to send Riskified only their most high-risk transactions and only pay for the transactions that the vendor approves. Approved transactions come with a money-back guarantee if they turn out to be fraudulent. The vendor charges a 4.9% per transaction fee if retailers only send a portion of their orders to Riskified and a 2.4% per transaction fee if the vendor reviews all a retailer’s international orders.
"Current risk management is broken because the business incentive of the fraud services provider is not aligned with the merchant's incentive to sell more," says Eido Gal, the vendor’s co-founder. "We've built a complete platform capable of discerning legitimate transactions from fraudulent ones, with zero risk to the merchant, lending them more opportunities to dramatically increase sales."