Guardian Analytics, a company that protects banks from cybercrime, has raised $9 million in venture funding.
The company’s Guardian Analytics FraudMAP captures a trove of data about online bank users so that it can predict their behavior and detect anomalies that may be attempts by cybercriminals to hijack bank accounts.
The third round of funding was led by Sutter Hill Ventures and included existing investor Foundation Capital. The money will be used to accelerate product innovation and expand sales and marketing, said Terry Austin, chief executive of the Los Altos, Calif.-based company, in an interview.
“The unfortunate thing is that cybercrime is getting more sophisticated,” Austin said. “And about 80 percent of the time, the damage is detected after money has been transferred.”
In 2009, losses related to online banking cyber attacks hit record highs, sparking lawsuits and debates among politicians on how to protect consumers.
Guardian doesn’t disclose its revenues. But it says that they are up 300 percent year over year and that 100 percent of customers are renewing their subscriptions. Austin said there are 25 banks using the company’s analytics now, up from three a year ago.
Guardian was founded in 2005 and has 27 employees. Rivals include Actimize, Entrust and RSA, but none takes the approach to fraud monitoring that Guardian Analytics takes. Others try to set up rules to predict consumer behavior and figure out when to disallow transactions. But Guardian says that advanced attacks are constantly evolving so that old rules don’t apply. Guardian Analytics has self-learning tools — a Risk Engine and a Risk Application — that determine if an individual’s behavior is inconsistent with expected behavior.
To date, the company has raised $16.25 million. Austin said that one of the company’s customers found that 78 accounts had been compromised with $1.5 million at risk. Another bank stopped a fraud attack that could have netted $800,000.