BioCatch, an Israel-based firm that uses an individual’s common tendencies when using online banking and eCommerce sites to identify potential fraud patterns, recently secured $10 million in Series A funding. The company plans to use the funds toward expansion in American and European markets.
A biotech company that monitors behavioral changes in the use of online-banking and eCommerce sites recently raised $10 million in Series A funding led by Blumberg Capital and OurCrowd, an equity crowdfunding firm. Existing investors also participated in the funding round.
The company, BioCatch, intends to use the funding to support research and development and expansion of its behavioral biometric authentication and threat-detection solutions in North America, Europe and Latin America.
BioCatch examines some 400 bio-behavioral signs to identify when something abnormal occurs. This includes how individuals on sites move their computer mouses and trackpads, how they hold their mobile device using its gyroscope and accelerometer, and whether when paying the user enters information from the number pad or keypad.
The company also can reduce friction associated with risky transactions, and it can authenticate visitors upon their return to a site or identify those exhibiting behaviors consistent with fraudsters. Enterprises use BioCatch as a tool to improve the employee-authentication experience while protecting access to critical IT assets, BioCatch said in its funding announcement.
“BioCatch’s goal is to provide effective fraud protection, while improving user-experience for customers visiting banking and eCommerce sites,” BioCatch CEO Benny Rosenbaum said in a statement. “This funding will allow us to continue strengthening our offering and expand our global reach in strategic markets, while keeping the world’s largest and most influential institutions safe and secure.”
In an interview with Gigaom.com, Uri Rivner, the company’s cyber strategy chief, said the company essentially applies a statistical model for normal use specific to each account. Then when the user accesses the account from a different device or location, it doesn’t worry about it, unlike other fraud-detection systems that might flag such activity.
“The problem today is not necessarily fraud, but [that] they want to make sure it’s really you, so they add a lot of security, which is friction,” Rivner said. “We’ve demonstrated that we can reduce that friction and operational costs. We can find things other technologies can’t find, looking for user interaction.”
The Israel-based company over the past year said in its funding release that it has seen significant growth and is deployed in numerous banks, eCommerce sites and enterprises globally. The company employs a staff of 20 team members.
Banks and eCommerce sites can integrate BioCatch into their existing security structures, and its system can work with other fraud-detection systems, the company said. The solution has demonstrated an 80% reduction in false positives for detecting the same amount of fraud, and it has identified cybercrime activities that other solutions failed to detect, including remote access attacks and malware.
“We are very excited to be partnering with BioCatch and to be part of such a forward-thinking company that helps protect consumers and enterprises from lurking cyber-threats,” said Elan Zivotofsky, OurCrowd general partner, said in a statement. “With a global network of investors, OurCrowd can help provide BioCatch with a direct line to large potential customers, key industry connections and strategic partners around the world.”
As part of the new partnership, Ron Moritz of OurCrowd and Alon Lifshitz of Blumberg Capital will be joining BioCatch’s board of directors.
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