UK online fraud company Featurespace has confirmed its successful close of a £25 million investment round. The money will be invested in Featurespace’s international growth ambitions. The 10-year old technology company sells software that used AI-powered online behavioural analytics to detect potential fraud. Its client-base includes banks, online gambling providers and payments processors.
The rise of the digital economy has made life much more convenient in many ways. We can look after our finances and do many of the other things that as recently as 10 years ago would mean a time-consuming trip to and from a physical location, often involving queuing, at the click of a mouse. The downside of that convenience is that the huge increase in our online activity, especially activity that involves making payments or providing personal information, has opened up a whole new and lucrative area of fraud – online fraud.
In the UK alone, the most recent statistics from UK Finance, the financial services trade body, show that online payments and banking fraud over 2017 cost £732 million. While 2018 figures have yet to be released it is almost certain that they will show a significant jump again. That cost is largely borne by financial services providers and their insurers, opening up a clear and willing market for Featurespace’s fraud-prevention software solution.
Originally a Cambridge University spin-out, Featurespace is led by chief executive Marina King, who has a strong online technology pedigree having previously held influential roles at Yahoo and at Guardian Media Group. The tech innovators have now raised a total of £53 million in investment capital. The latest round was led by New York venture capital heavyweights Insight Venture Partners. The latest round is reported to value Featurespace at several hundred million pounds, meaning that the company is on track to become the latest British tech unicorn, the term applied to fast growth companies that reach a valuation of at least $1 billion.
Featurespace plans an ambitious expansion into Europe and the USA over the next couple of years. The U.S. market is particularly valuable. CNP (card not present) online fraud alone was estimated to have almost doubled to $19 billion in 2018 from $10 billion in 2014. That is a huge potential market for providers of online fraud prevention and detection solutions like Featurespace.