Rajesh Ramanand's Signifyd offers fraud protection services to online sellers

Signifyd, co-founded by Rajesh Ramanand, raised $205 million in a funding round today at a valuation of $1.3 billion. The private company, based in San Jose, California, provides digital businesses with software that optimizes payments and protection from fraud and customer chargeback abuses, where a customer disputes a purchase with their bank to avoid payment.

While the pandemic lockdown last year sharply accelerated ecommerce sales, said Ramanand, who is the company’s CEO, in a statement, “the online checkout experience is stuck in 2015.”

Many retailers continue to manually check for fraudulent orders. Each year, digital businesses worldwide lose billions of dollars in sales because transactions are rejected due to buyers being misidentified as fraudulent or because of chargebacks.

Since April 2020, soon after the pandemic lockdown began in the U.S., about five to eight apparently fraud-mule purchases are being uncovered daily by Signifyd, up from only one or two prior to the pandemic, DigitalCommerce360.com reported. As more consumers look for work at home, criminals fool consumers into helping them steal expensive goods by placing fraudulent online orders.

Using artificial intelligence algorithms, Signifyd’s software analyzes data about a potential customer, including past purchase behavior, location, the package theft rates in their postal area and product shipment information to instantly approve or reject a transaction.

Signifyd offers a 100 percent financial guarantee to digital businesses against fraud and charge backs on approved orders. By tackling the fraud identification problem, Signifyd provided “us with between 6% and 7% uplift” in revenues, Santosh Marrivagu, head of UK & Ireland for Emma said in a statement. The European mattress brand started using Signifyd’s software during the pandemic. “And we were serving customers better by making sure legitimate buyers were not being turned away,” Marrivagu added.

Signifyd has thousands of customers including Samsung, Lenovo and Walmart. It earns revenues by taking a cut of the online transaction. In 2020, the company says its revenues doubled, compared to the previous year; but did not disclose specific numbers. It has 325 employees in San Jose, Denver, New York, Mexico City, Belfast and London.

Signifyd was founded in 2011 by Rajesh (Raj) Ramanand, 39 years old, and Michael (Mike) Liberty in a two-desk coworking space in Palo Alto, California. They had left their jobs at PayPal with an idea about tracking fraudsters on social media. The Silicon Valley start-up started growing after it shifted from offering a scoring solution to offering guaranteed protection from fraud. Liberty, a Stanford MBA, is the company’s chief product officer.

Early financial backers included Premji Invest, Bain Capital Ventures and American Express Ventures. Premji Invest is the Bangalore-based family office managing about $2.5 billion for Azim Premji, the founder of Wipro Technologies and leading Indian philanthropist. Wipro, the third largest Indian IT services firm, has a market value of $36 billion. 

Those investing in Signifyd today include Owl Rock Capital, Canada Pension Plan Investment Board and Neuberger Berman Investment Advisers. The $205 million raised will be used to accelerate growth in Latin America, Europe and other global markets as well as expand its risk intelligence and data science development and engineering teams, Ramanand stated. The company expects revenues this year to reach $200 million.

Earlier at PayPal, Ramanand was responsible for managing fraud and credit risk in Latin America, the Middle East and Africa. Prior to PayPal, he was with FedEx for eight years, in Memphis. He started out in the FedEx Innovation Labs as an engineer. In addition to building Fedex's package intercept system, he founded, built, and led their Risk Management Division for Payments and Shipping.

Ramanand earned a Bachelors in Computer Science from Tulane University, New Orleans, in 2001.

He says he is inspired by Timothy Eades, CEO of vArmour Networks, which offers systems to reduce operational and cyber risks. “He is a dear friend and mentor,” Ramanand told the San Francisco Business Journal.

With today’s investment, Ramanand said in a statement, “Signifyd has the roadmap, the resources and technical talent to enable merchants” to bring the customer experience in alignment with the explosive growth in digital sales over the past year.

Rajesh Ramanand’s photo is from his LinkedIn page

To receive Global Indian TImes stories kindly connect through either:

LINKEDIN: https://www.linkedin.com/company/global-indian-times/?viewAsMember=true

TWITTER: HTTPS://TWITTER.COM/GLOBALINDIANTI2  

FACEBOK: FB.ME/GLOBALINDIANTIMES

EMAIL: GITIMESCONTACT@GMAIL.COM

(c) Global Indian Times. Prior written permission required to reproduce any content. All rights reserved under U.S. copyright laws.