Day Zero identity verification start-up Socure has raised $35 million in a new round of private investment to support its growth ambitions.
The New York City-based firm says the funds will be used to support Socure’s growth, enhance its machine learning capabilities, and further its mission to eliminate identity fraud.
“We are grateful to have had significant investor interest despite the current economic environment and are proud to have taken less money than was on the table,” said Tom Thimot, CEO of Socure. “As we continue to build on our position as the leader in Day Zero identity, we are prioritizing investment in new verticals, talent, products and capabilities.”
The financing was led by Sorenson Ventures with participation from existing investors Commerce Ventures, Scale Venture Partners, and Flint Capital. The round also included new strategic investor participation from Citi Ventures, Wells Fargo Strategic Capital, and MVB Financial Corp. This brings Socure’s total funding to $96 million.
Increase in banking fraud
Socure’s predictive analytics platform applies artificial intelligence and machine-learning techniques with trusted online/offline data intelligence from email, phone, address, IP, device, velocity and the broader internet to verify identities in real-time.
Last month Socure announced the release of its first fraud report, How COVID-Era Government Aid Impacted Six Financial Services Sectors, showing a 134 percent increase in new account fraud attempts since the beginning of the COVID-19 pandemic.
Fraudulent credit card applications soared during the peak unemployment time to 93 percent. Challenger banks experienced a 200 percent increase in attempted DDA fraud between March and June. In addition, money transfer attempted fraud was up 43 percent.
Socure claims to reduce fraud for online new account openings by up to 95 percent with false positives of better than 1:1, and cuts manual review rates by as much as 90 percent.
One to watch
Earlier this year, the company was named to Forbes’ Top 25 Machine Learning Star-ups To Watch.
“Advanced identity screening solutions have become essential for financial institutions to effectively prevent fraud as cyber criminals are becoming increasingly sophisticated,” explained Travis Skelly, director, venture investing at Citi Ventures. “Socure has established itself as a market leader in the identity verification space and Citi Ventures is excited to support their ongoing growth story.”
“The current climate is accelerating a shift to digital channels, further emphasising the need for reimagined identity verification to better combat evolving patterns of fraud,” added Basil Darwish, managing director with Wells Fargo Strategic Capital. “Socure’s seamless and adaptive solution facilitates an enhanced customer experience, and we are pleased to support their continued growth with this investment.”
