American Express Invests in 2 Israeli Anti-Fraud Startups

American Express Ventures announced strategic investments in two U.S.-Israeli anti-fraud startups this week.

BioCatch, a behavioral biometrics startup, closed a $30 million round of growth funding that was led by Maverick Ventures. Other round investors included not only American Express Ventures but also NexStar Partners, Kreos Capital and OurCrowd, among others.

The company uses over 500 behavioral parameters to create a unique identity profile for end-users to authenticate them. Biocatch’s customer base is heavily weighted toward banks.

“BioCatch helps to answer the question, ‘who are you’ in an online world where fraudsters operate with the legitimate credentials of others, making it very hard to distinguish them from authorized users,” said BioCatch CEO Howard Edelstein in a press release announcing the investment.

Biocatch was founded in Israel in 2011 and is now based out of Boston. At the end of February, the company appointed its non-executive chairman Howard Edelstein as its new CEO.

Meanwhile, EverCompliant, an anti-money laundering tech company, announced this week that it had also secured a strategic investment from American Express Ventures to fight transaction laundering through e-commerce sites. The financial details of the deal were not disclosed.

Transaction laundering occurs when a fraudster uses a legitimate online merchant account to funnel illegal transactions through a merchant processor, online marketplace or other merchant service provider.  EverCompliant’s research shows that 6%-10% of a merchant service provider’s portfolio has unregistered merchants illegally committing transaction laundering, which amounts to nearly $500 billion a year worldwide.

“EverCompliant’s technology is helping merchant acquirers, payment aggregators and other service providers prevent bad actors from infiltrating their systems and ensure only legitimate transactions get processed,” said Harshul Sanghi, Managing Partner of American Express Ventures. “As more commerce shifts online, the need for advanced solutions that can help payment service providers fight fraudulent transactions will continue to grow. We look forward to helping EverCompliant as it addresses increased demand for its technology.”

American Express Ventures joined existing investors Arbor Ventures, Carmel Ventures, StarFarm Ventures and Nyca Partners. EverCompliant was founded in 2007 in Israel and is now based out of New York. Excluding the latest investment, EverCompliant had raised $13 million to date according to Crunchbase. The company will use the new funding to expand its operations and further develop its technology.

American Express Ventures is strategic investment group of American Express. Past fraud prevention startups that received investment from American Express Ventures include Signifyd, Trulioo and InAuth. The latter was acquired by American Express in 2016.

Elsewhere, in India, fraud analytics startup TrustCheckr raised $100,000 in seed funding from angel investors.

TrustCheckr was founded in Bangalore in March 2017 to enable businesses to identify fake or bot profiles using image processing and artificial intelligence.