We’re delighted to announce our newest investment in Nethone, an end-to-end SaaS solution that uses user datasets and machine learning models to prevent online fraud and to increase sales for online merchants. Nethone’s Know Your Users (KYU) solution allows merchants around the world to better serve their clients and prevent online fraud. Plug and Play Ventures is participating in their $6.7 million Series A, alongside Atmos Ventures, ARIA, Innovation Nest, and several angel investors.
Online payment fraud prevention is expensive. Not only do merchants have to pay for chargebacks and suffer from lost business due to false positives, but the business is also hampered by ever-growing manual review costs. Businesses in e-commerce, airline ticketing, money transfer, and banking services, will cumulatively lose over $200 billion to online payment fraud between 2020 and 2024.
Nethone has developed a proprietary fraud prevention solution based on a “Know Your User (KYU)” approach, which enables comprehensive, in‑depth, multidimensional profiling of all online users, from knowing customers to understanding their real behavior.
The profiling technology extracts more than 5,000 attributes in the background about every single user session. These attributes include geolocation data, customer behavior within session, time spent in the browser, device network characteristics, keystrokes, etc. Artificial Intelligence (AI) based solutions are becoming more sought after as they are the best way to deal with the volume increase and increase in sophistication of fraud techniques without the exorbitant costs that come with manual review and rules-based offerings. Nethone's passive behavioral biometrics allows online businesses to prevent more than 95% of account takeovers (ATO), with 10 percent higher fraud detection precision than traditional methods. Nethone has proven its ability to reduce chargeback rates, increase approval rates, and provide marketing insights.
The team behind Nethone
The global fraud detection and prevention market was valued at $20B in 2019 and is projected to reach $106B by 2027, growing at a 30% annual rate. There has never been a more pressing time to prioritize fraud prevention and we believe Nethone’s stellar team are the right folks to tackle this problem head-on.
Nethone’s team is composed of 65 full-time employees (FTE) with roughly 60% holding PhDs in AI and the average engineer having more than 8 years of experience. Their team, led by Hubert Rachwalski, have proven their potential as they doubled their client base in the past 12 months, applying their solution across many industries such as e-commerce, financial services, travel, and digital goods and services. Some of their clients include Farfetch, Cloudfox, Polish Airlines, Thales, Grover, Azul Airlines, Alfa-Bank, and Vtex.
Nethone’s innovative user profiling, combined with ML and a specialized team of data scientists, has demonstrated the strength of Nethone's products. These unique elements have allowed Nethone to win clients over its competitors proving their immediate ROI.