- Digital fraud prevention startup Sift has acquired Keyless, a passwordless multi-factor authentication service provider, for an undisclosed sum, according to a company press release on Wednesday. Sift also said in an email that it raised another $25 million, adding to a prior $50 million funding round in April.
- The company said it will provide Keyless’ authentication services to online retailers and businesses internationally.
- The new funding, combined with the prior round, will go toward creating new products and hiring more product, engineering and sales employees abroad, according to an April press release.
The San Francisco-based company, which was founded 2011, has now raised a total of $184 million, a spokesperson for the company said.
The COVID-19 pandemic represents an opportunity for both cybercriminals that steal from unsuspecting victims and anti-fraud tech companies trying to stop them. Almost 70% of executives who responded to a Sift survey this year said the rise in attempted fraudulent purchases significantly affected their businesses. The survey also found that nearly two-thirds of payment fraud incidents came from mobile devices last year, up from 51% in 2019.
But as the pandemic continues to catalyze e-commerce, some businesses are struggling to implement measures to protect consumers. That lag comes at a cost. A June report from Fidelity National Information Services found that a fourth of merchants are having difficulty introducing payment security measures.
E-commerce retailers could lose more than $20 billion this year from online fraud, up from $17.5 billion last year, said a report from research firm Juniper Research released earlier this year.
Online payments market will rise to $11.3 trillion by 2026, according to a report from online outlet Research and Markets, so it’s not surprising that tech startups and payments veterans are creating anti-fraud technology.
Sift cited the growing threat of cybercrime, particularly account takeovers, as part of the reason to add Keyless’ offerings to its account defense services.
“Protecting businesses from fraud while reducing customer friction is the foundation of a Digital Trust & Safety strategy,” Sift CEO and President Marc Olesen said in the release this week, noting the Keyless technology meets regional regulations like PSD2 requirements in Europe.
In a its prior April $50 million fundraising, Sift attracted money from the investment firms Insight Partners, Union Square Ventures and Stripes, according to venture capital news outlet TechCrunch. At that time, Sift also announced hiring Eu-Gene Sung to serve as its new chief financial officer.