Deals

Fraud detection startup 41st Parameter raises $13M

41st Parameter announced today it has raised $13 million in its fourth round of funding. The company helps prevent fraudulent online transactions.

Its flagship product, FraudNet, combs through the Internet to make sure people trying to process transactions or open bank accounts aren’t using stolen information.

Georgian Partners led the round, with Kleiner Perkins Caufield & Byers, Norwest Venture Partners, and Jafco Ventures participating. The full press release follows:

41st Parameter, the global leader in device recognition for fraud prevention and online audience identification, is pleased to announce $13M in Series D financing. Georgian Partners joins Kleiner Perkins Caufield and Byers (KPBC), Norwest Venture Partners (NVP) and Jafco Ventures in recognizing the growth potential for 41stParameter’s cloud-based device recognition technology.

The new funding will be used to further fuel R&D – focused on both the flagship FraudNet platform and the AdTruth the pro-privacy digital media device recognition division. In addition, the funds will be used to support 41st Parameter’s expansion as it builds up its presence in Silicon Valley and grows its sales and customer operations around the world.

41st Parameter has seen strong momentum for its FraudNet fraud detection and prevention platform within some of the world’s largest enterprises. The company is one of the fastest growing players in the industry, with 40% year over year growth in H2 2011 while building a record pipeline of deferred revenue. On the AdTruth side of the business, 41st Parameter is solving the audience identification, targeting and consumer privacy needs of a rapidly evolving global digital media industry across desktop, mobile and other emerging platforms.

“41st has built an impressive reputation as an industry leader by using applied analytics to recognize and prevent fraud,” said Justin LaFayette, a managing partner at Georgian Partners. “They have also been successful in applying their established device recognition technology to the complex world of digital media. 41st Parameter is a perfect example of maximizing R&D investment across multiple market categories.”

“As electronic and online payment methods continue their rapid growth, there is – and will continue to be – a critical need to identify and stop fraud in the global ecommerce, banking and travel industries,” said Alan Naumann, chief executive officer at41st Parameter. “Coupled with the demand in the digital media space, we have a real opportunity to solve two critical business problems with our best-of-breed core technology. We’re excited by the challenge and thankful for the support of our investors.”

As mentioned above, 41st Parameter will use these new funds to:

  • Continue to develop new functionality for FraudNet – the leading anti-fraud solution used by 75 percent of the world’s top banks, two thirds of the world’s largest airlines, more than 120 of the top global ecommerce brands and thousands of SMB ecommerce retailers, 41st Parameter continues to innovate to stay ahead of current and emerging threats.
  • Establish AdTruth as a leader in pro-privacy device recognition – already able to solve many of the audience identification challenges for desktop and mobile advertisers, including those caused by Apple’s recent decision to deprecate UDID. AdTruth has also been widely recognized for its efforts to meet the needs of digital marketers while adhering to global privacy regulations and respecting consumers’ desire for greater transparency and control over how their personal information is used.
  • Grow the company’s presence in Silicon Valley, attracting top engineering talent.
  • Expand worldwide sales channels – further strengthening and extending direct sales operations and channel partners around the world.

“These are exciting times for 41st Parameter,” continued Naumann. “The opportunities are there and our investors are behind us as we look to the future.”