e-Commerce Fraud is Suddenly Everywhere. One Company Sees it All.
Today we are announcing our investment in EverC’s Series B round. Here’s our thinking on why this company is so important.
e-Commerce and other types of online transactions received a massive boost from the pandemic, delivering convenience for millions of people stuck at home and a lifeline for businesses who’ve seen physical footfall plunge as shoppers shelter in place. This boost also has a dark side — a parallel boom in fraudulent transactions online (Transaction Laundering). This year has already seen an incredible 19% rise in online transactions globally, with fraudulent transactions by value rising 4.4%, up from a 3.7% increase over last year, according to an ACI Worldwide Inc. report.
The growth in e-Commerce created a real opportunity for criminals to make online transactions unsafe for both businesses and consumers alike, priming the market for solutions that prevent bad actors from infiltrating the web. EverCompliant (now named EverC) is one of these companies which we met about 5 years ago and followed their progress over the years, as we do with many of our eventual investments. Back then, while it was still clear that e-Commerce was the way forward, it was still at a relatively early stage with bricks and mortar sales reluctantly giving way to online.
Fast forward to today and we are in a totally different world, both economically and socially; more and more people shop, bank and do most anything else you can think of online. So when a colleague suggested we reconnect with the EverC team, we jumped on the opportunity and were pleased to discover a company with an incredibly sophisticated solution to address online fraud, but from a different angle.
Instead of focusing on fraud from the buyer side like many other successful fraud companies, EverC focuses on fraudulent activities conducted by the sellers. For example, It can detect sellers claiming to sell legitimate products, while actually covering for the sale of illegal products. It can also identify the unapproved sale of brands or potentially even counterfeit products, and is even capable of identifying businesses selling in one geography but running the transactions in another to avoid paying taxes. One of the interesting examples of fraud identified was a creative florist who in addition to selling flowers online also conducted online drug transactions from his business as if they were flower orders.
Today, EverC is the leading provider of Online Data Intelligence and transaction laundering detection and prevention. The company offers financial institutions and marketplaces the most advanced automated system that requires no integration and provides complete online coverage. EverC’s technology uses artificial intelligence and machine learning to scan hundreds of millions of web domains and find clues for any illicit activity.
We based our decision to invest in EverC on four main pillars:
- Marketplace fit. Not only is EverC a true market-solving business, it’s doing well by doing good for society. Today, businesses offering online transactions are rapidly growing (those that aren’t going digital are suffering), and this is only going to accelerate. We haven’t even scratched the surface of where the online marketplace is going; it’s clear that the need for safety in this space is paramount to how society will function. There is a lot of fraudulent activity happening in different sectors of the online marketplace and EverC can be an effective answer to all this. It’s almost a no brainer in terms of market fit.
- Customer-centric. EverC has made an extraordinary effort, from the very beginning, to be uniquely customer-centric. Every aspect of onboarding and product development is based on listening to their customer’s pain points and trying to address their needs. This, more than anything, will help them grow and retain business, and develop their product offering wisely.
- Broad and bespoke tech solution. The company has a broad tech stack, which enables them to have a wide range of solutions that suit a customer’s specific needs. They have the ability to expand their solution to endless possibilities giving them an added advantage over competitors.
- Exceptional team, true industry experts, and a cutting edge AI R&D division. Ron Teicher (co-founder and CEO), and the two other co-founders Noam Rabinovich and Raz Abramov are true industry insiders, who know their stuff inside out. They’ve built an exceptional team of industry experts to create a company that is a leader in their space.
Revenue in the eCommerce market is projected to reach a market volume of US$3.3 trillion by 2024, with around 4.6 billion users, according to a Statista analysis. We believe EverC has the right product and team to be the global leader in tackling the online fraud that’s infecting online commerce. Their ability to address customer needs effectively and with flexibility will give them a leg up as they look to both the North and South American, European, and Asia markets.
We are proud to partner with them and look forward to an exciting future for EverC.