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Biometrics Startup Incognia Raises $31 Million for Anti-Fraud Tools

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Biometrics startup Incognia has raised $31 million to develop its location identity offerings.

The funding, announced in a Wednesday (Jan. 31) press release, will also help the company expand its presence in North America, Europe, Africa and the Middle East, while also delving into the consumer internet, financial services and eCommerce fields.

“Incognia is quickly emerging as a market leader addressing fraud across a variety of customer segments, which is critical in today’s environment as fraudsters become increasingly sophisticated thanks to recent GenAI breakthroughs and the global proliferation of real-time payments,” said Charles Birnbaum, whose Bessemer Venture Partners led the funding round.

According to the release, Incognia’s technology combines device fingerprinting and exact location intelligence data into “one flexible risk signal that can be customized for every stage of the user journey.”

The company’s offerings include device tamper detection with advanced location spoofing prevention, tamper-proof location verification for user identification and phishing-resistant and frictionless account security.

“Used individually or in combination, these features drive results, including an 80% reduction in account takeovers, a 51% reduction in fake account creation, and an 84% reduction in new user abandonment,” the release said.

The company’s last funding round came in 2022, when it raised $15 million. This newest round follows a year in which 43% of financial institutions saw an uptick in fraud compared to the prior year, resulting in fraud losses increasing by about 65% from $2.3 million in 2022 to $3.8 million in 2023.

Already this year, mortgage company loanDepot experienced a cybersecurity incident at the start of the month, where an unauthorized third party was able to gain access to certain company systems and encryption data. And last month, VF Corporation, the owner of Vans, The North Face, Timberland and Dickies, had difficulties fulfilling orders following a Dec. 13 cyberattack.

And Birnbaum’s comments about fraudsters benefitting from AI were echoed last year by Tobias Schweiger, CEO and co-founder of Hawk AI.

As he told PYMNTS, “the application of [AI] isn’t just reserved for the good guys … and bad actors are accelerating what I would call an arms race, using all of those technologies. As a financial institution, one has to be aware of that accelerated trend and make sure your organization has enough technology on the good side of the equation to fight back.”