Signifyd Raises $20M To Tackle Online Merchant Chargebacks

Signifyd, the California-based startup that provides fraud protection to businesses in the eCommerce space, announced Thursday (Feb. 25) that it closed a $20 million Series B funding round, led by Menlo Ventures, with additional participation from Allegis Capital, IA Ventures, QED Investors, Bill McKiernan and Tim Eades.

The latest financing brings the startup’s total funding to date to $31 million.

Signifyd said it plans to use the funding to accelerate growth, scale its infrastructure and continue to expand its team of fraud experts.

“We’re saving our customers millions of dollars in revenue, and merchants of all sizes are taking note,” Signifyd Cofounder and CEO Rajesh Ramanand said in a press release. “We raised our Series A just seven months ago, and our traction has been tremendous. What’s more, we believe the technology we’re applying to eCommerce is the technical foundation for the next generation of insurance products.”

Under the company’s business model — which it says tackles problems with eCommerce ranging from money lost from chargebacks to customer dissatisfaction to expenses tied to fraud investigations — protection comes through technology that alerts retailers which payments to accept and, at the same time, guarantees those payments in the event there is a chargeback. In the release detailing its $7 million Series A capital raise last July, the company said it has been growing revenue 20 percent month over month.

“Over the last year, Signifyd has shown tremendous growth and great unit economics with very little capital raised,” added Pravin Vazirani, general partner at Menlo Ventures. “Signifyd has permanently altered the course of the fraud detection industry. There used to only be software providers who didn’t back their product with a guarantee. Signifyd’s ability to give a guarantee at the scale and precision of millions of events from thousands of customers is truly unique. I believe Signifyd is primed to not only solidify its place in eCommerce fraud detection but change the way we think about more traditional insurance markets.”