Forter Raises $32M To Grow Fraud Prevention Footprint

Forter, the fraud prevention company known for its automated, real-time Decision-as-a-Service solution for online merchants, announced today (April 21) that it’s closed a $32 million Series C funding round led by Scale Venture Partners.

This round brings the two-year-old company’s total funding to $50 million and included participation from its Series B investors, Sequoia Capital and New Enterprise Associates (NEA). This funding helped Forter triple in size and build its global fraud prevention platform for online merchants.

As a result of his company’s investment, Scale Venture Partners founding member and partner Rory O’Driscoll joins Forter’s board of directors. The funding is going to be earmarked for Forter’s expansion throughout the U.S. and also used to accelerate the company’s fraud prevention platform to more online merchants.

Forter founders (left to right): Alon Shemesh, Michael Reitblat, Liron Damr.

“A large bulk … will be invested back in our research and development to improving our systems even further. Fighting fraud is a moving target. It constantly evolves, and you constantly have to have more and more capabilities and be constantly growing with it,” Forter CEO Michael Reitblat told PYMNTS in an interview. “The rest of our money will be spent growing our customer acquisition and growing ourselves toward customer success here in the U.S. to acquire more and more of those U.S. retailers.”

For Forter, there’s a particular reason, he noted, as to why adding more retailers to its customer list matters for scaling growth.

“A lot of what we do is reliant on the data that we see and the people that we track across all networks. The more customers we have, the more data we have, and so we are able to give every other customer we have a better service. Because now we can track the same fraudsters across everyone,” Reitblat said.

It’s also important to him that Forter becomes a large, independent company that can focus on growth for the next five, 10 and 15 years — instead of just being focused on getting a valuation boost. What Forter was after in its most recent round was finding the right partners to grow in the way that aligns with Forter’s mission.

“The eCommerce fraud ecosystem is constantly evolving, growing and becoming more complex,” said O’Driscoll. “Forter’s intelligent, fully automated antifraud solution is unique. Combine real-time, automated fraud prevention decisions with a seasoned executive team and dedicated emphasis on research, and you get a company which is squarely in position to lead the change that online retailers need. Forter is an exciting addition to the Scale portfolio, and we look forward to working with Michael and his team.”

That mission, of course, is combating and eliminating eCommerce fraud. As demonstrated by Forter’s Global Fraud Attack Index, online fraud attacks grew 215 percent over the course of 2015, and since then, fraudsters have only gotten more sophisticated.

“In today’s world of growing fraud attacks, we want to completely remove the fear of fraud from eCommerce and help retailers capture more sales,” Reitblat said. “We are very excited to have Scale Venture Partners join Sequoia Capital and NEA as our partners.”

Of course, cybersecurity, online fraud and helping retailers fend off fraud have become growing trends, but what really gave Forter an edge — at least, according to Reitblat — was when EMV was introduced in the U.S., which shifted more fraud online.

“Every online retailer deals with fraud, especially after we saw EMV be introduced in the U.S. We see online fraud levels on the rise. Nothing is surprising there. Fraud becomes a bigger part of eCommerce, and eCommerce is growing itself. When you look at global eCommerce, that’s probably close to $2 trillion now, and it’s probably going to double in the next few years,” Reitblat explained.

And that’s a trend that isn’t going away anytime soon.

“Everything is becoming digital, and you can’t solve it without having a good grip on fraud,” he said, which goes back to Forter’s overall mission: helping online retailers fight fraud.

“The impact we can have on eCommerce revenue when implemented across global retailers is maybe over $100 billion of added transactions,” Reitblat said. And it may take time, but he expects Forter to be a $1 billion or even $2 billion revenue company as a result, which provides an easy value proposition for the right investor, he added.