Nethone raises $6.7M to fight ATOs with behavioral biometrics, Stytch scores $30M
Nethone has raised $6.7 million in a Series A funding round, with plans to use the capital to accelerate its go-to-market efforts for its passive behavioral biometrics to provide protection against account takeovers.
The funding round was led by Atmos Ventures and Aria, with additional participation from Investment Nest, Plug and Play Ventures, Firlej Kastory and several angel investors.
The company also plans to dedicate a portion of the funds to strengthening its proprietary Know Your User (KYU) profiling technology, according to the announcement. Nethone says its passive behavioral biometrics seamlessly prevent more than 95 percent of account takeover attempts, with 10 percent higher fraud detection precision than traditional methods.
This additional protection has taken on greater importance due to the professionalization of fraud fueled by COVID-19, the company states.
“Barriers to entry for fraudster-wannabes have been steadily decreasing,” explains Nethone CEO Hubert Rachwalski von Rejchwald. “More and more sophisticated SaaS-based tools became available for anyone with some financial resources at their disposal. Today, these are advanced technical solutions built by well-organized, highly experienced groups of rogue IT experts. Wrapped in a user-friendly interface and excellent customer support they allow for complex anonymization and automation functionalities as well spoofing of historically trusted digital identities that most of the incumbent fraud detection solutions stand no chance of spotting.”
New features may also be added to Nethone’s software.
“Our KYU profiling technology gives access to first-hand real-time insights about what is really happening with the device, how this device interacts with the servers of the platform and, last but not least, what is the raw behavior — keystrokes, mouse movements, gyro or accelerometer readings, touches on mobile,” says Nethone CPO Aleksander Kijek, describing the company’s behavioral biometrics. “These are currently over 5000 attributes that we are extracting passively in the background about every single user thanks to years of targeted research and engineering. Importantly, our goal is never to affect the customer journey by staying invisible in the background nor invade end-user privacy thanks to the low-level nature of the attributes we collect.”
Nethone’s client base has more than doubled in the past 12 months, with increasing onboarding volume for its ecommerce, digital goods and services, and financial services customers.
Stytch to develop API-first passwordless authentication
The Series A funding round officially takes Stytch out of beta and was led by Thrive Capital with participation from Coatue Management and existing backers Benchmark and Index.
The fresh funds will reportedly be used to expand the authentication options Stytch offers to include biometrics, logins with WebAuthn and OAuth, QR codes, and push notification logins.
The firm is also planning to expand its user infrastructure features, build-out session management and advanced fraud detection solutions, and hire 20 people by the end of the year.
Stytch was founded last year by Reed McGinley-Stempel and Julianna Lamb, two former Plaid employees.
For context, Plaid’s open banking platform works on a single API, and it is used by reportedly 11,000 banks and financial institutions across Europe, the U.S., and Canada.
Building on Plaid’s experience but exploiting the dynamism and versatility of a startup, Stytch now aims at eliminating passwords entirely via the use of APIs and SDKs (software development kits).
According to the startup, these tools will enable companies to improve onboarding and retention by removing passwords while improving app security and speeding up the overall engineering process.
Before the recent Series A funding, Stytch has tested a number of passwordless authentication methods, including WhatsApp passcodes, email magic links, and SMS.
The tests conducted during the last year were performed via selected developers, but launching out of beta now means the general public will be now able to try Stytch’s passwordless solutions.
The trend towards eliminating passwords is a consistent one across the cybersecurity industry.
For instance, Transmit Security recently raised $543 million in Series A funding to develop passwordless solutions, and Apple is currently testing passkeys with biometric security on iPhones and other devices.