By Matt Gallagher, Red Herring
Cybercrime prevention company ThreatMetrix has raised $18 million in a Series D round of financing led by August Capital. The company produces the Cybercrime Defender Platform, a suite of security products that use a multifaceted approach to identify various anomalies indicating fraudulent transactions.
The company employs Global Device ID for real time proprietary data collection, matching 15 million profiles per day for extensive data analytics on 250 different parameters for intelligent anomaly matching across all devices and platforms with HTML-5 support. The company then provides two device ID scores for the transaction, including an “Exact ID” to authenticate returning customers utilizing browser based cookies and LSOs, as well as a “Smart ID” to identify fraudsters using attribute matching independent of cookies, compiling both scores to validate results. The platform also enables proxy piercing capabilities to determine the true IP.
“All you need to do is read the paper every day,” explained Reed Taussig, ThreatMetrix’s CEO, in a recent phone conversation in between events at the Merchant Risk Council in Las Vegas. “There has been an absolute explosion of cyber crime. This is no longer a situation of theoretical conversations. Everyone knows someone who has been a victim of cyber crime. The threat is very real, and everyone who uses the Internet is at risk.”
It’s a perfect storm, and ThreatMetrix is riding the wave. What’s likely convinced investors to continue investing in the company is its 300 percent annual growth rate achieved each of its three years of existence. The company currently serves 5,000 websites, many of them Global 2000 companies who need a financially solid company to rely on. This new funding will serve to boost the company’s balance sheets as it continues to sign new customers, Taussig explained.
A number of trends are contributing to that growth, including the movement of data centers into the cloud that brings sensitive data beyond companies’ firewalls, and more employees bringing their own devices to work, demanding the utmost security in enterprise systems.
The company will spend the new investment on international expansion. Already, the company counts 50 percent of its customers outside of the US. With a heavy pool in Europe, its international growth is rapidly expanding, Taussig said. Much of the funding will also be used to create a database in Amsterdam to serve their European clients, who feel more secure when their data is protected on EU soil. The database is set to go live in April.
While growth reflects the quality and cost effectiveness of the company’s services, the increasing threat of cybercrime is also a large contributor. Last year was the second highest in history for cybercrime, with 58 percent the work of the hacker group Anonymous, according to a recent report from Verizon.
The proof of the company’s services is in the results. Its customers experience a 75 percent fraud reduction the instant they turn on the company’s platform. In the near future, the company is focused on three priorities: expanding its platform, expand internationally especially into Asia, and expand into new markets. This latest round of funding brings the company’s investment total to $42.1 million from investors include US Venture Partners, August Capital, Tenaya Capital, and CM Capital.