San Francisco-based fraud prevention technology firm Arkose Labs has raised an additional $22 million in Series B funding led by Microsoft’s venture fund, the company announced on Tuesday (March 24).
The Microsoft fund, dubbed M12, joins existing investors PayPal and U.S. Venture Partners. Arkose said the new funding will empower its fight to bankrupt the business of online fraud and abuse.
The new round of funding will go toward platform development, new hires and global expansion, Arkose said.
“We are proud to welcome Arkose Labs to M12’s portfolio,” said Nagraj Kashyap, Microsoft vice president and global head of M12 in a statement. “With Arkose’s end-to-end anti-fraud platform, enterprises across the globe can better protect against fraud and abuse long term.”
He said many Microsoft businesses are already benefiting from the technology, “and we are committed to supporting Arkose’s accelerated growth.”
It has never been more profitable to commit fraud, Arkose said, as there is simple software available online that enables hackers to launch large-scale attacks.
Earlier this month, Arkose reported a 30 percent increase in attacks on gaming platforms in the first quarter of 2020. Arkose found most of that growth stems from new account registration attacks, which increased more than 70 percent. Attacks targeting this sector are increasing at a rapid pace and often demonstrate highly sophisticated fraud patterns, researchers said.
Arkose found the attacks on gaming platforms grew especially for logins and payments. Fraudsters tap into so-called global “sweatshops” to scale up attacks with human resources, while keeping costs low. Arkose said they detected an increase in human-driven in-game spam and abuse, with hackers trying to improve their success rates in attacks that involve two-way interactions.
The company’s platform promises to nip schemes at the source by making cybercriminals use massive effort to conduct their attacks, which eliminates the return on investment and profitability of fraud. This is a fundamental shift in fraud prevention, and one that is resilient to emerging attack patterns, the company said.
Today, Arkose protects many Fortune 50 companies in the financial services, eCommerce, media, gaming and emerging technology sectors. In addition to longtime customer Microsoft, the firm’s other customers include GitHub, Electronic Arts, Singapore Airlines, Roblox and Twilio.
The cybersecurity sector is crowded with dozens of competitors including Riskified, Signifyd, Kount Inc. and Sift.
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