Blackbird and Airtree back anti-fraud startup from the team behind ThreatMetrix in $15.6 million Seed round

Online fraud prevention startup Darwinium has raised US$10 million (A$15.6m) in a Seed round led by local VCs Blackbird and Airtree.

The US-based customer protection platform was founded by Bondi entrepreneur Alisdair Faulkner, cofounder of cybersecurity startup ThreatMetrix, which sold in 2018 for more than A$1.2 billion (US$817m). Joining him at Darwinium is former ThreatMetrix chair and CEO Reed Taussig, who’s now chairing the new startup.

The cash – several prominent angel investors including Naval Ravikant and Jeff Fagnan also chipped in – is earmarked for product and customer expansion as the business launches globally into the security and fraud sector.

Faulkner said Darwinium is delivering an entirely new approach to customer protection by combining a company’s internal cybersecurity tools with those used to fight fraud to deliver a single window into a user’s entire digital journey. It comes at a time of growing account compromise and online fraud, facilitated by swathes of breached credentials. He built Darwinium to unify a disjointed approach to security controls.

“The industry is seeing a surge in fraudsters capitalising on new technology and techniques to adapt attacks targeting online businesses and currently many are operating with ‘point-in-time’ solutions that are not fit for purpose,” he said.

“Alongside this, the security and fraud divisions of these businesses are operating in siloes which leaves them wide open to attacks. Fraud Farms walk right past bot defences, and social engineering and malware render fraud solutions useless.

“Protecting your customers must be about continuously scrutinising their digital journey and behaviour, rather than a point-in-time evaluation. It requires a joined-up system that allows proper collaboration between digital security and fraud via one singular view.”

Darwinium delivers risk-based journey orchestration across every digital touchpoint – Web, Apps and APIs. Faulkner said siloed and limited approaches are consistently causing unnecessary friction for customers when businesses want to protect their sales process and cart abandonment.

“They are often deterring good customers and losing businesses billions in both revenue, fraud losses and unnecessary operational costs,” he said.

“Darwinium’s platform addresses these challenges and allows online businesses to capture valuable intelligence across their sales journey. Risk decisions can then favor the customer and not the fraudster.”

Faulker said Darwinium is unique in its ability to build complete “signatures” for every digital interaction, and across digital journeys, and is already seeing early success with customers across global travel, ecommerce, banking, payments and gaming.