nSure.ai raises $6.8 Million in seed funding to make the digital goods space fraud-free
By Alex Zeltcer
Two and a half years ago, we set on a journey to eliminate digital goods fraud.
And so, nSure.ai was founded: a predictive AI fraud protection company as a solution to a growing problem. Just a few days ago, we announced a $6.8 million seed fundraising round.
To say that we are excited is an understatement.
The digital goods space is plagued with fraud as fraudsters keep finding their way into the ecosystem and thriving.
Digital gift cards, top-up and prepaid cards, software and game keys, tickets, and digital wallet transfers are an attractive target to fraudsters because they are delivered immediately and easy to resell online.
As such, fraud can occur in a blink of an eye and this is why accurate, real-time fraud protection is crucial for digital retailers more than ever.
So, we’ve developed a solution that brought the fraud protection and guarantee revolution to the digital goods space.
In fact, we wouldn’t be here if we hadn’t reduced decline rates of transactions by 90% from an industry standard of 20% to only 2%.
We will forever be grateful to DisruptiveAI, Phoenix Insurance, Kamet (AXA-backed venture builder), Moneta Seeds, and private investors for believing in us, for trusting our vision and leadership.
We take the trust instilled in us very seriously and are dedicated to our mission to enable safe digital transactions and empower merchants to sell with more confidence.
But we feel like there is another story to tell: the one about scratching your own itch and founding a startup.
From fraud victims to fraud fighters
Before founding nSure.ai, we actually experienced the cruelty of scalable fraud firsthand.
We’ve been in the same position many retailers of digital goods find themselves in now - overwhelmed with sophisticated attempts of fraud.
During the first week of operating our then online gift card business, a whopping 40% of our sales were fraudulent, resulting in chargebacks.
In a way, we were lucky. The fraud stopped at the 40% mark only because we were out of inventory. If we had more inventory, it would have been a much bigger percentage.
At that point, something clicked in our minds.
We realized there is a huge problem, big enough to force us to shut down our business.
To make matters worse, the available tools did little to nothing to alleviate our pain. As this was all happening in 2014, the market was severely under-served and virtually non-existent when it comes to digital goods fraud.
So we decided to take matters into our own hands.
The first step was to invest in a machine learning team that would crack the problem.
We realized that the only way to actually solve this issue was to track both normal and fraudulent consumer behavior, and be able to classify users accordingly.
Fast-forward a couple of years and you could say our fraud problem was under control.
But we still had a problem: we declined a lot of legitimate customers.
The truth was that we were never completely in control - there were still cases of what’s called false positives/declines.
However, our machine learning solution kept getting better all the time as we fed it more and more data.
Our solution became so good at learning that it not only kept up with the scalability of the fraud but surpassed most of the third-party tools that were designed for physical goods fraud.
We thought about other industries where similar scenarios could happen. Soon, we realized this fraud problem goes far beyond digital gift cards and affects all digital goods.
As fate would have it, that is exactly where our expertise excels, which is why we decided to make a spin-off of our online gift card business - and nSure.ai was born.
What gets us out of bed in the morning
We were in your shoes. We felt your pain.
It is what led our path and shaped our mission and vision.
As such, our mission for nSure.ai is to bring the technological and chargeback guarantee revolution to the digital goods sector, freeing digital goods retailers of worry and opening greater opportunities to scale.
We believe that fear of fraud should NEVER EVER dictate your business decisions because you can fight back. Fraud is a real but solvable problem.
In this futuristic world we’re actively creating, buyers are satisfied with every transaction they make, and digital sellers are winning big time: reaching their growth objectives, maintaining close relationships with their customers, and sleeping soundly knowing their business is in safe hands.
To achieve this, our patented predictive AI technology has already been tested at scale and handles transaction value of hundreds of millions of dollars every year.
Because we're so confident in our solution, we're able to offer the only true chargeback guarantee for digital goods.
In the end, we’re eager to tell online retailers that they can now feel confident selling higher-risk digital goods without accepting fraud as part of the business and compromising the customer experience.
In the burgeoning world of startups, we are living in a time when investors are looking for strong opportunities to back companies that are glowing in a market that is especially challenging.
The same goes for the cybersecurity market that is incredibly active right now, even more than it already was, and the fact that traditional fraud detection solutions can’t effectively deal with digital goods fraud.
Fraudulent digital transaction attempts against businesses increased 46% worldwide and 22% in the U.S. between March 2020 and March 2021.
These attacks aren’t going away. On the contrary, they are likely to continue and gradually increase.
And when you factor in the long-term damage to brand loyalty and customer attrition, our estimates show total fraud costs to be around the $108 billion mark for global fraud.
This is where nSure.ai comes into play.
nSure.ai is the only solution existing today that is tailored for the digital goods space and automatically approves 98% of transactions with a 100% chargeback guarantee.
By utilizing machine learning, AI, and behavioral analytics, we are able to perform real-time risk assessment and user behavior profiling in less than 300 milliseconds, allowing us to accurately weed out fraud.
We certainly can tip those scales in favor of the entire digital goods space - and we will.
What's next for nSure.ai and our customers?
We have yet to scratch the surface of the value that our solution can unlock for digital merchants. These funds will go towards further developing our predictive AI and machine learning algorithms to continue our mission on a greater scale.
The continued investment in nSure.ai will primarily mean three things in the coming months and year:
- Expansion to more industries and segments such as consumer Fintech (digital wallets, neobanks, BNPL, and more) and ticketing of all types (especially last-minute like online travel).
- A larger fraud fighters team is needed to support our growth, so we’ll be looking to expand our marketing, sales, and R&D teams.
- Better offensive measures that include the use of boosting trees-based algorithms together with unsupervised methods for feature discovery. This will enable nSure.ai to automatically create AI-based models in a scalable fashion.
The world is about to meet nSure.ai in its full glory - and we can’t wait!
If anything of this sounds interesting, please come join us.
Alex Zeltcer, CEO & Ziv Isaiah, CTO