Behavioral biometrics startup BioCatch today announced it has raised $145 million, bringing its total raised to $175 million. BioCatch’s offering could help combat the rise in identity theft and cybercrime that’s been growing over the past few decades.
While the number of identity theft victims in the U.S. fell by 15% (to 14.4 million) in 2018, the next year saw over 1 million children become victims, according to a report by Javelin Strategy. And fraud is on the upswing as a result of the COVID-19 pandemic, notes BioCatch. U.S. Federal Trade Commission data shows that consumer complaints related to the novel coronavirus doubled to 7,800 in the last week of March, averaging out to nearly $600 per consumer.
BioCatch’s AI-driven platform protects identities by analyzing more than 2,000 behavioral parameters of user-device interactions to generate real-time risk scores, stopping new account fraud and detecting the use of stolen identities by analyzing how information is entered into online applications. It matches user activity against human and non-human (e.g., malware, aggregator, and robot) behavioral profiles to verify identities throughout a session, from login to logout, even spotting signs that a victim is being unwittingly guided through fraudulent activities like money transfers.
In practice, BioCatch selects 20 unique parameters from the aforementioned 2,000 to create a user profile that comprises physical metrics — including left- and right-handedness, hand tremors, and pressure — with cognitive factors like eye-hand coordination and usage preferences. The platform compares real-time session data with the profile baseline in the background, leveraging machine learning algorithms to strengthen those baselines over time. And it looks for the presence of known risky behaviors in confirmed fraudulent sessions that might indicate a transaction is illegitimate.
Integrating BioCatch’s tech with a mobile app or website only requires adding a piece of code, and it’s designed to feed into existing rule engines without impacting speed or performance. Managers can view behavioral insights, top indicators, and real-time risk scores or customize alerts if they so choose.
BioCatch claims to have over 90 million users across customers like Zelle, American Express, Itau Unibanco, Natwest, and 40 of the world’s largest global financial institutions. And it says those customers have seen an average 10 to 15 times return on investment. Buoyed by its success, the company recently signed its first ecommerce client, and it plans to launch in the public sector sometime this year.
Bain Capital Tech Opportunities led this latest series C investment in BioCatch, with participation from Industry Ventures, American Express Ventures, CreditEase, Maverick Ventures, OurCrowd, and others. It comes after a year in which the nine-year-old startup’s annual recurring revenues grew by 150% year-over-year and follows a $30 million series B in March 2018.
Other companies occupying the nearly $22.68 billion identity verification space include San Francisco-based Checkr, which raised $100 million in April 2018. Microsoft led a $10 million funding round in Trusona, a startup that aims to verify internet users are who they say they are. Meanwhile, Socure and OneLogin earlier this year raised $30 million and $100 million, respectively.
BioCatch CEO and chair Howard Edelstein says the new capital will accelerate the company’s growth and enable it to broaden its product offerings as it looks to expand its workforce of 150 employees.