Signifyd provides an end‑to‑end Commerce Protection Platform that leverages its Commerce Network to maximize conversion, automate customer experience and eliminate fraud and customer abuse for retailers. In 2020, because of digital commerce’s boom, each of Signifyd’s top 500 customers more than doubled their ecommerce revenue. The combination of their own agility and Signifyd’s AI-driven innovation allowed them to power through pandemic disruptions and fulfill consumer orders at record-breaking volume and speed.
Automation: The Embryonic Idea for Startup
Mike Liberty and Rajesh Ramanand started Signifyd in June 2011. The idea for this company sparked when they saw two major trends:
- First, almost every merchant had a manual review team that researched Facebook, LinkedIn, Twitter, and other social websites to review transactions for risk, which meant that something was missing from the decisioning process on the front end.
- Second, there was an increase in the number of small and medium businesses (SMBs) moving from the brick-and-mortar world to selling online and they had no good solutions to deal with the liabilities involved in card-not-present transactions.
It is essential to notice that Signifyd’s team has a strong background in payments and fraud. Going back several years ago, Ramanand developed the fraud and risk team at FedEx Corporation where they built everything in-house. This was a period during which he learned a lot about payments, fraud, and risk. In 2009, this man left FedEx and moved to PayPal, where he headed up the Emerging Markets Risks and focused on Latin America, the Middle East and Africa, all high-risk profile countries. Here was where he met his co-founder Liberty, who was the head of Digital Goods Risk at PayPal.
“One of the things I learned quickly is that, in these countries, merchants do not have the amount of data that is usually available in the US regarding customers. For instance, in the US, merchants can do phone/name/address lookups to find out something about that person. In Brazil, Mexico or South Africa, merchants do not have this type of information. They learned to do the same things with less data and the social graph was used extensively for this purpose.” – said Ramanand.
“We realized there was an opportunity to use the social graph data to automate what was being done manually by the agents.” – he added. At Signifyd, they are building a solution that all merchants across the board could use (not only the largest enterprises, but also the smaller businesses that sell online).
Signifyd’s Role in the Prevention of Online Fraud
Signifyd offers a complete fraud prevention solution that includes an accept or decline decision (along with a risk score and indicators) and a manual review platform for its clients’ agents. What it is doing differently in the industry is bringing in new types of data sources to be able to make better risk decisions, to be able to add less friction to its clients’ good users while declining the bad ones.
When Signifyd say it fights fraud using the social graph, they are not thinking only about LinkedIn, Twitter, and Facebook, but also about disparate sources of data that connect the offline identity of a user with the online persona users claim to be. For example, if a person goes online to a website and the e-mail address is associated with three social networks, this company can use that e-mail to discover the person’s name and location. Then, if it gets a physical address in the same location and it already know that a certain person lives there, it can make a reverse look-up on that address using another service and find a match on the name using the e-mail address and a physical address.
“This is a huge indicator for risk, an indicator that traditionally has not been taken into account in this industry. If a match does not occur, you have the opportunity to decline those people or put them through manual review and extra research.” – said Ramanand.
In addition, this company also can collaborate with companies that already have a fraud solution. It could be an additional social matching layer which companies could plug in for their scoring. Furthermore, if those company performs traditional manual reviews by searching LinkedIn or Facebook before making a decision, it could allow it to use our data without integration.
“The search is based on name, IP, e-mail, phone, address. We receive all this information and enrich it from external data sources, combine the information and make it realistic in terms of the connections between them and provide the company with a score along with other indicators which will tell them if the social name matches the billing name or if the social address matches the billing address. This is really powerful and the first time it’s being done in our industry.” – Ramanand explained.
Ecommerce’s Tsunami and Business Win in Covid-19
Of course, Signifyd is successful when its customers are successful. In 2020, Signifyd doubled its annual sales, a testament to the determination and alacrity of those clients. This company’s solutions have helped its merchant customers overcome the disruption of COVID-19 and power exceptional growth in an exceptional year.
Many companies in retail have seized opportunity during disruption, giving their customers more ways to interact with them. Their collective success speaks to the value of convenience — those customer experiences truly represent the path forward for retail in the 21st century. Like its customers, Signifyd scaled up amid a COVID-19 pandemic that changed the shape and future of shopping and commerce in an instant.
“As consumers, we take seamless ecommerce experiences for granted. For the merchant, sustaining that quality through 100-percent-plus growth, massive supply chain disruptions and highly volatile consumer demand is just remarkable,” Ramanand said. “We are inspired by our clients’ resilience and creativity, and glad that our platform scaled flawlessly alongside them.”
Inspired by the bold thinking of those customers and the retail market, the company launched products, programs, and an expanded global presence to better serve the new world of commerce. Open and wide-ranging discussions followed, leading Signifyd to develop its Commerce Protection Platform, Decision Center, Authorization Rate Optimization solution and its Business Continuity Package aimed squarely at pandemic disruptions.
As ecommerce exploded in popularity due to pandemic lockdowns, Signifyd’s customers turned to Signifyd’s advanced automated order flow to tackle massive online order surges. The platform also protected them from the dual threats of professional fraudsters and “friendly fraud” — committed by typical customers worn down by financial strain and months of sheltering at home.
Signifyd’s customers’ success was reflected in record revenue for Signifyd. The company was able to invest in expanding its global workforce and opening its Latin American headquarters to better serve its growing base of customers, such as Walmart Mexico, in the region.
Lynn Carbine, head of trading for Current Body, a direct-to-consumer electronic beauty device company, said Signifyd has been crucial to the brand’s ability to keep up during the pandemic.
“It simply would not have been possible for us to review incoming orders manually without Signifyd,” she said. Had Current Body not replaced its previous fraud protection provider with Signifyd in advance of the pandemic, Carbine added, “we would have had a significant challenge ahead of us.”
The unparalleled growth in every aspect of the business puts Signifyd in a prime position to continue to work with the world’s most successful brands and retailers. Signifyd starts its second decade of existence with a bold new look and logo and a bold new vision.
Awards: Proof That Vision and Execution Are on the Mark
In 2020, Signifyd was named the market’s best commerce protection provider among those offering chargeback guarantees, awarding by technology research and advisory firm Aite Group. The company received this because of its innovative machine-learning by, its high order approval rates, its superior management services for fraud and non-fraud chargebacks and its vast network of clients that serves to constantly improve its solutions’ performance.
Signifyd ranked ahead of the six other key players in Aite’s Chargeback Guarantee Vendors matrix. The rankings were based on a head-to-head, in-depth analysis by the independent research firm, which included product reviews, demonstrations, customer interviews and evaluations of key performance metrics of each vendor.
“We’re pleased to be recognized as best-in-class by the Aite Group,” Signifyd CEO Raj Ramanand said. “This recognition is a reflection of the fact that we are constantly innovating while also improving upon our existing products to ensure that our customers can practice fearless commerce — increasing their efficiency and raising their conversion rates while limiting their risk. This should make the crucial choice of a fraud and abuse prevention vendor a much easier one for the ecommerce market.”
“Clients are very pleased with Signifyd’s performance and service,” the advisory firm wrote in its Aite Matrix: Global Chargeback Guarantee Vendors. “They receive high marks in terms of strong partnership, great to work with, high approval rates. One client, having used other chargeback guarantee solutions, is very pleased with the performance it receives from Signifyd and has found it to be among the best.”
Or more recently, this year, Signifyd also has been named the Merchant Anti-Fraud Solution of the Year at the prestigious FStech Payment Awards, hosted by FStech, a leading website for technology and business decision-makers in the UK and EMEA. The payment awards panel of judges, which comprises key figures and influencers from the financial services industry, noted the innovative way that Signifyd’s Commerce Protection Platform protects online merchants from payment fraud and consumer abuse.
“It’s gratifying to see our work with some of retail’s brightest enterprises validated by FStech,” said Ed Whitehead, Signifyd Managing Director, EMEA. “We’re truly in a new era of ecommerce, where understanding the identity and intent behind each order is more important than ever. Our customers have contributed immeasurably to our work building the best way to get that done and we look forward to what more we’ll accomplish together.”
The citation for the entry quoted a third-party study by Forrester Research that found that the platform not only increased ecommerce conversion by 4% to 6%, but that for the clients who adopted it, the return on investment was 454%.
Signifyd & Its $205M Series E Funding: New Era of Identity-Centric E-commerce
In April this year, Signifyd has announced securing $ 205M E-series growth equity financing led by Owl Rock Capital, with participation from financial services provider FIS and management organizations Canada Pension Plan Investment Board (CPP Investments) and Neuberger Berman Investment Advisers.
The new funding values the company at $1.34B and incorporates significant resources to expand its trade protection platform and identity graphic globally, through digital purchases and payments. The combination of the investment and accompanying experience will help the company accelerate its expansion in Latin America and continue its growth in Europe, Middle East, and Africa.
“Last year, we noticed that e-commerce sales and influence were boosting to 2025. However, the online shopping experience is stagnant in 2015. With this latest investment, Signifyd has the roadmap, resources and technical talent that enable merchants to bring the customer experience to that future state and continue to drive it for years to come,” said Raj Ramanand, CEO of Signifyd.
Signifyd will continue its legacy of achieving a better customer experience by protecting and optimizing identity-centric commerce. the firm created a marketplace for guaranteed fraud protection against all chargebacks, including those resulting from consumer abuse. The firm designed its powerful business protection platform to provide comprehensive fraud protection, abuse prevention, and payment optimization. The platform provides merchants with an average revenue increase of 5% to 7% and more in many cases
“As the global e-commerce market continues to grow and purchasing and payment needs become more complex, merchants need more sophisticated solutions to optimize transaction acceptance while protecting commerce. We are impressed by Signifyd’s innovative approach to this market need and are excited to partner with them,” said Jim Johnson, Director of Commercial Solutions at FIS.
The FIS investment deepens Signifyd’s connectivity in the financial services and payments ecosystem, adding to the experience of previous investors such as American Express Ventures and Bain Capital. The global presence will encompass continued additions to Signifyd’s product teams, customer success, risk intelligence and data science, and in turn, will expand its development and engineering teams.
The Bottom Lines
Creating strict connection with the problems that its customers face as well as their success, Signifyd has become one of the rising stars in the fraud protection market. Taking quick look to the company’s expansion in recent years, it can be concluded that its next chapter will be a much more innovative and impressive one.