Simility wins $17.5m backing for AI-powered anti-fraud system
A company that uses artificial intelligence (AI) in its fraud detection system has received a $17.5m funding injection from investors including online payment platform PayPal. Simility, which was founded in 2014, uses machine learning software to assist with analysing user data and help spot suspicious activity that might indicate identity fraud. Increasing numbers of companies are using AI in fraud detection, with major investors backing the development of commercial systems that can reduce risks through effective data analysis.

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Simility, which develops a fraud detection platform that uses machine learning, has announced a $17.5 million round of funding led by Accel, with participation from new strategic investor PayPal. Existing investors The Valley Fund and Trinity Ventures also contributed.

Founded in 2014, Palo Alto-based Simility is one of a number of companies using machine learning to help those working in the fraud detection realm collect and analyze data. Simility’s software is aimed at companies of all sizes, from enterprises to SMBs, and is designed to prevent various kinds of fraud. This includes account takeover (ATO) fraud, whereby someone tries to gain access to another person’s online account. Here, Simility looks at various session, device, and behavioral biometrics and builds a profile for what constitutes “normal” user login behavior.

Simility can also help prevent account origination fraud, where a bad actor tries to set up a new account using stolen or fake identities. For example, the company’s software analyzes various session-related indicators, including time spent across pages, keyboard patterns, and so on, while it may also use data garnered form third-party sources to establish the credibility of information provided during setup.

Simility had raised around $7.5 million prior to now, and with its latest cash influx the company said it plans to “accelerate global expansion” of its partner network, as well as growing its sales, customer service, and data science teams. More specifically, Simility is looking to push its sales operations in the U.S., Brazil, and Europe and to grow its data science teams in Europe.

PayPal is a notable addition to the company’s roster of investors and is indicative of Simility’s target markets: Finance and online retail industries are rife with fraud.

“Digital disruption in the financial and commerce sectors has resulted in the need for a fraud and risk management solution that goes beyond legacy, static rule-based offerings to offer protection in a digital first, big data analytics-focused environment,” said Simility cofounder and CEO Rahul Pangam. “This latest funding round will enable us to enter our next phase of growth by bolstering our world-class team of industry veterans in sales, customer success, and data science to meet market demand.”

Automated fraud detection has emerged as a key focal point for tech firms and investors. Paris-based Shift Technology, which offers a platform that uses AI to help companies combat insurance fraud, recently closed a $28 million funding round. Pindrop has nabbed some big-name backers, such as Google Capital, for its AI-based phone fraud detection service, and Israel-based Forter has grabbed big bucks to help retailers battle online fraud using machine learning.

Simility claims “multiple global Fortune 500 financial services organizations” as clients, including major U.S. banks.