Overview
To predict and prevent online fraud more effectively than cybercriminals can adapt, Sift Science has raised $30 million in a Series C round of venture funding. This round was led by Insight Venture Partners, marking an important milestone for the company as it continues its mission to safeguard online transactions from malicious activities.
According to the U.S. Internet Crime Complaint Center (IC3) annual report for 2015, reported internet crimes—including data breaches, credit card fraud, phishing, and identity theft—have cost victims approximately $1.07 billion. While these losses are significant, they represent only a fraction of the financial impact cybercriminals have on businesses.
The digital landscape is increasingly targeted by fraud attempts, with sites and apps ranging from e-commerce platforms to on-demand marketplaces under attack. Sift Science leverages machine learning and artificial intelligence to identify and flag suspicious activities in real time. CEO Jason Tan has emphasized the limitations of traditional rule-based systems, which often fail to detect emerging threats or deny legitimate transactions.
The Challenge of Fraud Prevention
In a world where e-commerce has grown exponentially, static, rules-based systems have proven inadequate. These systems rely on predefined criteria to flag potential fraud, leaving businesses struggling to balance customer trust with transaction security. While these systems may reduce operational costs by denying some legitimate transactions, they also risk missing critical trends that could lead to significant financial loss.
Sift Science addresses this challenge through its innovative use of machine learning. By continuously analyzing online behavior, the company identifies patterns that distinguish normal activity from aberrant behavior linked to fraudulent activities. This approach allows Sift Science to detect threats before they escalate and provide immediate feedback to businesses to help them respond appropriately.
Achievements and Expansion
The company’s success is evident in its growing list of clients. Early adopters include major e-commerce platforms such as Airbnb, Yelp, Indeed, Zillow, Match.com, Twilio, OpenTable, and Wayfair. These partnerships underscore the potential of Sift Science to transform online security by integrating its fraud prevention solutions into existing businesses.
CEO Jason Tan has outlined a vision for Sift Science beyond e-commerce, focusing on expanding its reach to include community-driven platforms and content-focused sites. The company’s commitment to innovation is evident in its recent certification as SOC Two II compliant, ensuring that its systems meet the highest standards of security and reliability.
Competitors and Market Position
In a competitive market, Sift Science positions itself as a leader alongside established players like Fortinet and Symantec, while also challenging emerging competitors such as ThreatConnect and Zero Trust Network Security (ZTNS). With its unique approach to fraud detection and robust client base, Sift Science is well-positioned to disrupt the online security industry.
Conclusion
As cybercrime continues to evolve, companies like Sift Science are playing a critical role in protecting businesses from growing threats. By combining cutting-edge technology with a deep understanding of customer needs, Sift Science is setting a new standard for fraud prevention in the digital age. With its recent funding round and expanding client base, the company is poised to make a significant impact on online security for years to come.
