ThreatMark raises $23M to combat fraud as volumes hit grim milestones

While money is rapidly flowing into the coffers of criminals carrying out fraud around the world, capital is being invested in those defending against fraud, with ThreatMark announcing a major funding round to back its market expansion.

The global cost of fraud surpassed a trillion dollars in total losses, according to stats compiled by Feedzai and a partner, while regulators in the U.S. and UK have identified APP scams and social media as big parts of the problem.

$23M for ThreatMark

ThreatMark has raised $23 million in funding to expand the market reach of its behavioral biometrics and other fraud prevention technologies in key regions. The company also plans to boost its research and development and upgrade the capabilities of its software.

The funding round was led by a $15 million contribution from Octopus Ventures and Riverside Acceleration Capital (RAC). The former is focused mainly on the UK and Europe, while the latter is based in the U.S., ThreatMark notes in the announcement.

Springtide Ventures contributed the other $8 million in the form of a convertible note.

ThreatMark also raised $13 million in 2023, including $5 million from Orbit Capital late in the year.

The company claims a 75 percent year-over-year increase in annual recurring revenue (ARR) in the past year, and says it has not raised a total of $37 million.

“The team has had a stellar 12 months of growth, and with our support, we’re confident they can continue to build on this momentum through expanding into the UK and U.S. market,” says Octopus Ventures Partner Paul Davidson in the company announcement. “Online banking fraud is a huge and complex problem for the financial services sectors, one that requires an increasingly sophisticated approach to fraud detection. ThreatMark is set to play a progressively central role combating it.”

Among its advantages in the market, ThreatMark says it has demonstrated effectiveness at stopping complex digital fraud threats, including authorized push payment (APP) scams.

APP and social media scams common

APP scams have become one of the top priorities for the UK’s Payment System Regulator, according to its new report “Unmasking how fraudsters target UK consumers in the digital age.”

This type of fraud alone cost UK consumers 341 million pounds (US$426 million) in 2023, the report says.

The report describes the methods and costs of purchase, romance, impersonation and other kinds of scams. The most common vector of APP scam delivery is social media and messaging platforms, and social media platforms feature prominently in the report as common channels for fraud.

BioCatch responded to the report with a blog post calling for more data sharing and cross-regulatory collaboration, along with the use of behavior and device intelligence.

The U.S. Federal Trade Commission counts $10 billion in total losses from fraud in the country during 2023, $4.6 billion of which was from investment scams.

The figure is a 14 percent increase from 2022, as digital tools make fraud attacks easier. Impersonation was the most common type of fraud reported in 2023.

Like the UK Regulator, the FTC fingers social media as the most fraud-riddled channel of communication.

Scam losses reach $1T

A new report from Feedzai and the Global Anti-Scam Alliance (GASA) pegs the amount of money stolen by fraudsters over the past year at more than $1 trillion.

A mere 4 percent of scam victims are able to fully recover their stolen money, according to the 2024 Global State of Scams Report.

The report is drawn from a survey with more than 58,000 respondents, and shows that consumers are facing frequent fraud attempts, with half exposed to at lest one scam per week. Victims in the U.S., one of the hardest-hit countries along with Denmark and Switzerland, lost over $3,500 on average, while losses in Pakistan, Kenya and South Africa range from 3.4 percent to 4.2 percent of national GDP, illustrating the impact of fraud volumes on developing economies.

While fraud operates across borders, the report emphasizes the need for fraud prevention strategies to be tailored to the challenges of the specific region in which they are deployed.

Feedzai’s RiskOps platform, meanwhile, has been awarded as the “Best Use of AI for Fraud and Financial Crime Prevention” at the 7th Regulation Asia Awards for Excellence 2024.

Article Topics

behavioral biometrics  |  BioCatch  |  biometrics  |  Feedzai  |  financial crime  |  fraud prevention  |  funding  |  identity verification  |  ThreatMark