News, Education and Events Decoding Digital Payments & Fraud

News, Education and Events Decoding Digital Payments & Fraud

AI Antifraud Startup Fraugster Nets $5 Million in New Funding

AI Antifraud Startup Fraugster Nets $5 Million in New Funding

Artificial intelligence and machine learning continue to gain momentum in the online fraud-prevention space. The most recent startup to benefit is Fraugster, a German-Israeli venture that this week received $5 million in new financing the company said it will leverage for international expansion. Berlin-based Earlybird Venture Capital led the round with participation from existing investors Speedinvest, Seedcamp and others. Fraugster’s founders have e-commerce payment experience on the payment gateway side and in analytics and risk management. The company said it developed and tested its technology over several years and that, based on average performance, merchants that use it can reduce fraud by 70 percent while increasing conversion rates by as much as 35 percent. “We founded Fraugster because we could see the opportunity to tackle fraud with modern technology,” said Fraugster CEO Max Laemmle. “Existing rule-based systems as well as classical machine learning solutions are expensive and too slow to adapt to new fraud patterns in real-time. We have invented a self-learning algorithm that mimics the thought process of a human analyst, but with the scalability of a machine, and gives decisions in as little as 15 milliseconds. One of the reasons why we are so fast is because we’ve invented our own in-memory database technology which has no limitation on scale.”