E-commerce fraud fighter Nethone raises $6.7M

Nethone, a Poland-based startup that provides fraud protection technology for travel suppliers, online retailers and financial service companies, has raised $6.7 million in Series A funding.

The round is led by Atmos Ventures and ARIA with participation from Innovation Nest, Plug and Play Ventures, Fiirlej Kastory and several angel investors. 

The company says it will use the funding to accelerate its go-to-market efforts for its passive behavioral biometrics, which it says allows online businesses to stop more than 95% of account takeovers.

Nethone says it has seen an escalation in the “professionalization of fraud” since its founding in 2016, and a spike in particular since the start of the COVID-19 pandemic as the demand for e-commerce increased. 

“Barriers to entry for fraudster-wannabes have been steadily decreasing. More and more sophisticated SaaS-based tools became available for anyone with some financial resources at their disposal," says Nethone CEO Hubert Rachwalski von Rejchwald.

"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."

Nethone’s proprietary “Know Your User” (KYU) technology creates user profiles using machine learning and encompasses more than 5,000 attributes.

“The forward-looking answer to anyone who wishes to effectively transact online is to deeply understand every single user, as they browse the website or use a mobile app. 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,” says Aleksander Kijek, Nethone chief product officer.

“These are currently over 5,000 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 says it has more than doubled its client base in the past 12 months. In addition to expanding its go-to-market efforts, the company says it will accelerate the development of new features.