Anti-Fraud Firm ClearSale Lands $254M From IPO

The fraud protection company ClearSale has raised $254 million through its July 30 initial public offering (IPO) on Brazil’s B3 stock exchange.

The Miami company made the announcement on Wednesday (Sept. 15), saying that it had realized $147 million from the IPO. ClearSale plans to devote half of that money to support organic growth, with the rest going to acquisitions, innovation and development.

“The IPO was the path we chose to expand the business and follow our mission to promote consumer confidence in the digital ecosystem,” said ClearSale CEO Bernardo Lustosa. “Investor confidence in our team, culture, solutions and future plans are now added to the reliability that our clients have already placed in the company over the past two decades to ensure their safety and maintain focus on the consumer.”

Founded in 2001, ClearSale bills itself as the world’s largest provider of card-not-present (CNP) fraud services, with the tools and expertise to reduce chargebacks and false positives. The company has 4,000 customers across 170 countries, with operations in Florida, Brazil, Australia and the U.K.

“As the pandemic shifted consumers in many regions from in-store to online shopping and fraud attacks on eCommerce merchants increased, ClearSale’s 2020 net revenue grew by 65.7%, compared to 2019 growth of 35.5%,” the company said. “The company’s 2020 net international revenue grew by 132.7% to comprise 11% of the total.”

PYMNTS explored the rise of online fraud and the danger of false positives in a recent Deep Dive.

Learn more: Deep Dive: How Merchants Can Reduce the Risk of False Positives Through AI and ML

As noted in that feature, research shows that as much as 15% of CNP transactions are incorrectly flagged as fraudulent, leading to yearly revenue losses of $118 billion, far greater than this year’s projected eCommerce fraud losses ($20 billion).

Those losses can cost merchants as much as 75 times the amount of actual fraud, both in the value of canceled transactions and the opportunity cost of losing future income from consumers who decide to take their business to a competitor.