Riskified Bundle
What is Riskified's Founding Story?
In the booming world of online shopping, where sales are expected to hit $6 trillion in 2024, keeping fraud at bay is a huge deal. This is where a company that changed the game in e-commerce fraud prevention came in, using smart tech like AI and machine learning.
Founded in 2012 by Eido Gal and Assaf Feldman, this company set out to make online shopping safer and smoother for everyone. Their goal was to help businesses grow by tackling fraud and chargebacks effectively.
The company's innovative approach aimed to cut down on fraud losses for online sellers and also improve the customer experience by reducing mistaken rejections of good orders. This focus on a better checkout process was key to their early strategy. Today, their platform helps merchants approve more valid orders and avoid costly chargebacks, allowing them to confidently expand their reach. For a deeper dive into their strategic positioning, you might find the Riskified BCG Matrix insightful.
What is the Riskified Founding Story?
The founding story of the company is rooted in a shared vision to revolutionize online fraud and risk management. Established in 2012 by Eido Gal and Assaf Feldman, the company emerged from their combined expertise in technology and finance, aiming to tackle the escalating issue of e-commerce fraud.
The Genesis of a Fraud Prevention Pioneer
Founded in 2012 by Eido Gal and Assaf Feldman, the company was born from a desire to address the growing challenges in online fraud prevention. Their backgrounds in technology and finance provided a strong foundation for developing innovative solutions.
- Eido Gal and Assaf Feldman are the founders of the company.
- The company was established in 2012.
- The founders aimed to transform online fraud and risk management.
- Their combined expertise in technology and finance was crucial.
The founders identified a significant gap in existing fraud prevention methods, which were failing to keep pace with the rapid expansion and increasing sophistication of online retail. This inadequacy resulted in substantial losses for merchants, not only from fraudulent chargebacks but also from the rejection of legitimate customer orders, a problem often referred to as false declines. The company's initial business model was built around an artificial intelligence-powered platform designed to analyze transaction data and accurately identify individuals behind online interactions.
Addressing E-commerce Fraud Challenges
Traditional fraud prevention methods were proving insufficient for the burgeoning e-commerce landscape. This led to significant financial losses for online merchants due to both fraudulent transactions and the mistaken rejection of genuine customers.
- E-commerce fraud was a growing concern in the early 2010s.
- False declines of legitimate orders impacted merchant revenue.
- Sophisticated online fraud required advanced prevention techniques.
- The company aimed to provide a more effective solution.
The company's first major offering was a fraud prevention solution that included a 100% money-back guarantee against chargebacks for transactions it approved. This innovative 'chargeback guarantee' was a significant differentiator, effectively transferring the financial risk of fraud from the merchant to the company. This guarantee provided merchants with enhanced confidence to approve a greater volume of orders, thereby increasing sales and customer satisfaction.
The Chargeback Guarantee Innovation
A key differentiator was the introduction of a 100% money-back guarantee on approved transactions against chargebacks. This shifted the financial risk from merchants to the company, fostering greater trust and enabling more order approvals.
- The chargeback guarantee was a novel approach.
- It provided merchants with unprecedented risk mitigation.
- This allowed businesses to approve more legitimate orders.
- The guarantee aimed to reduce revenue loss from fraud.
The company secured its initial seed funding in July 2013, raising $1.7 million. This crucial investment was led by notable investors including Entrée Capital and Genesis Partners. The capital infusion was instrumental in the development and launch of their initial fraud prevention platform, allowing the team to build out the necessary technology and begin addressing the identified market need. While specific details regarding the selection of the company name are not widely publicized, the name 'Riskified' itself effectively communicates its core value proposition: to make online transactions 'risk-free' or 'risk-verified' for merchants. The company's establishment was heavily influenced by the rapid growth of the e-commerce market and the increasing financial burden that fraudulent activities placed on online businesses, creating a strong demand for a reliable and effective fraud prevention solution. Understanding the Target Market of Riskified is key to appreciating the company's early strategic focus.
Early Funding and Strategic Naming
In July 2013, the company successfully raised $1.7 million in seed funding from investors like Entrée Capital and Genesis Partners. This capital was vital for platform development, and the name 'Riskified' was chosen to reflect its mission of reducing transaction risk for merchants.
- Seed funding secured in July 2013 amounted to $1.7 million.
- Key early investors included Entrée Capital and Genesis Partners.
- The funding supported the initial platform development.
- The company name reflects its core mission of risk reduction.
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What Drove the Early Growth of Riskified?
The early growth of the company was characterized by strategic funding rounds and the development of a robust fraud prevention platform. From its initial concept, the business rapidly evolved into a market leader.
Seed and Series A Funding
Following its seed round in July 2013, the company secured $4 million in Series A funding in February 2014, with Entrée Capital leading the investment. This capital infusion was instrumental in expanding product offerings and scaling operations.
Chargeback Guarantee Program Launch
A significant milestone in the company's history was the 2016 launch of its chargeback guarantee program. This program offered merchants guaranteed protection against fraud, becoming a key element of its value proposition.
Platform Effectiveness and Merchant Benefits
The platform's advanced capabilities, including behavioral analysis and machine learning, proved highly effective in fraud detection and prevention. Merchants saw improved approval rates, often increasing by 4-8 percentage points.
Global Expansion and Series E Funding
By 2018, the company had expanded its physical presence with new offices in Europe and Asia to support global operations. Further growth was fueled by a Series E funding round of $165 million in November 2019, led by General Atlantic.
The company's financial performance demonstrated significant progress, with a full year of positive Adjusted EBITDA in 2024. This achievement, coupled with a substantial cash flow surplus, highlighted disciplined management and successful product diversification, with revenue from additional products growing by approximately 90% year-over-year in 2024. Understanding the Mission, Vision & Core Values of Riskified provides further context to its development.
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What are the key Milestones in Riskified history?
The history of the Riskified company is marked by significant achievements in fraud prevention, driven by technological advancements and strategic initiatives. Since its inception, the company has focused on leveraging artificial intelligence and machine learning to combat e-commerce fraud, aiming to provide merchants with a more secure and efficient transaction environment.
| Year | Milestone |
|---|---|
| 2014 | Company founded, focusing on AI-driven fraud prevention. |
| 2016 | Introduced its chargeback guarantee program, de-risking online transactions for merchants. |
| 2024 | Achieved its first full year of positive Adjusted EBITDA, reporting $17 million. |
| March 2025 | Launched Adaptive Checkout, integrating conversion optimization with fraud prevention. |
| April 2025 | Recognized with the 'most innovative fraud prevention solution' award at the MPE awards. |
Key innovations have centered on its AI-powered platform, which utilizes machine learning and behavioral analysis to achieve high fraud detection accuracy, often outperforming competitors. The company also launched Adaptive Checkout in March 2025, designed to dynamically adjust the checkout process for each customer to reduce false declines.
AI-Powered Platform
Leverages machine learning, behavioral analysis, and elastic linking for high-accuracy fraud detection and prevention.
Chargeback Guarantee Program
Introduced in 2016, this program covers chargeback costs, significantly reducing risk for online merchants.
Adaptive Checkout
Launched in March 2025, this solution combines conversion optimization with fraud prevention to personalize the checkout experience.
Partnership with IXOPAY
In January 2025, this collaboration aimed to enhance payment security by integrating payment orchestration with AI-driven fraud detection.
CNBC Recognition
Named to CNBC's World's Top Fintech Companies in 2024, highlighting its industry standing.
MPE Awards
Awarded 'most innovative fraud prevention solution' in April 2025, underscoring its product development.
Despite its successes, the company has faced financial and market challenges. While achieving positive Adjusted EBITDA of $17 million in 2024, it reported a GAAP net loss of $35 million for the same year, with a further net loss of $13.9 million in Q1 2025. The company's stock experienced significant volatility, losing over 80% of its value from its September 2021 peak by early 2025, leading to reports of potential takeover interest.
Financial Performance
While achieving positive Adjusted EBITDA in 2024, the company continued to report GAAP net losses, indicating ongoing investment or operational costs.
Stock Volatility
The company's stock price saw a substantial decline from its peak by early 2025, raising questions about market valuation and potential strategic shifts.
Balancing Fraud Prevention and Customer Experience
A significant challenge for merchants, and by extension the company, is minimizing false declines while effectively preventing fraud. A June 2025 survey indicated that a substantial percentage of merchants struggle with this balance, potentially losing significant revenue from legitimate orders.
Operational Efficiency
In response to market pressures, the company undertook workforce adjustments in 2024, streamlining its global operations to enhance efficiency.
Competitive Landscape
The e-commerce fraud prevention sector is dynamic, requiring continuous innovation and strategic partnerships to maintain a competitive edge.
Market Perception
Reports of potential takeover interest suggest that market perception and valuation remain key considerations for the company's strategic direction, as detailed in the Brief History of Riskified.
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What is the Timeline of Key Events for Riskified?
The journey of Riskified began in 2012 when Eido Gal and Assaf Feldman founded the company. This marked the start of a significant evolution in fraud prevention for e-commerce businesses. The early years saw crucial funding rounds that fueled its growth and product development, laying the groundwork for its future as a key player in the industry.
| Year | Key Event |
|---|---|
| 2012 | Riskified was founded by Eido Gal and Assaf Feldman, marking the beginning of its mission to combat e-commerce fraud. |
| July 2013 | The company secured its initial seed funding of $1.7 million, providing essential capital for early operations. |
| February 2014 | A Series A funding round of $4 million was raised, further supporting the company's expansion and technological advancements. |
| 2016 | Riskified launched its chargeback guarantee program, a significant offering that provided merchants with financial protection. |
| 2018 | New offices were established in Europe and Asia, signaling a strategic move to bolster global reach and customer support. |
| November 2019 | The company announced a substantial Series E funding round, raising $165 million to accelerate its growth initiatives. |
| July 28, 2021 | Riskified made its debut on the NYSE through an Initial Public Offering (IPO), valuing the company at $4.3 billion. |
| December 31, 2024 | The company achieved its first full year of positive Adjusted EBITDA, reporting $17 million on annual revenue of $327.52 million. |
| January 9, 2025 | A partnership with IXOPAY was formed to enhance payment security and fraud prevention capabilities. |
| March 5, 2025 | Riskified filed its annual report on Form 20-F for the fiscal year ending December 31, 2024. |
| March 2025 | The company launched Adaptive Checkout, a new solution designed for optimizing conversion rates and preventing fraud. |
| April 3, 2025 | Riskified received the 'most innovative fraud prevention solution' award at the MPE awards. |
| May 14, 2025 | Q1 2025 revenue was reported at $82.4 million, an 8% increase year-over-year, with positive Adjusted EBITDA maintained for six consecutive quarters at $1.3 million. |
| June 18, 2025 | A survey at Ascend 2025 revealed that 85% of merchants face challenges balancing customer experience with fraud prevention, and 5% of legitimate orders are falsely declined. |
AI Advancement and Product Expansion
Riskified is prioritizing the enhancement of its AI platform and the broadening of its product offerings. This strategic focus aims to deliver more sophisticated and effective solutions for e-commerce businesses.
Financial Projections and Investment
For 2025, the company projects revenue between $333 million and $346 million, with Adjusted EBITDA forecast between $18 million and $26 million. Investment in research and development is set to increase by nearly 20%.
Global Reach and Market Position
The company is expanding its global presence with fraud summits planned in six major cities worldwide. This initiative underscores its commitment to international growth and supporting the expanding global e-commerce market, which is expected to reach approximately $8 trillion by 2028.
Analyst Outlook and Strategic Goals
Analysts project an average target price of around $6.03 for the company's stock in 2025. Ongoing strategies include new client acquisition, cross-selling, and continued R&D investment to maintain its leadership. Understanding the Competitors Landscape of Riskified is key to appreciating its market positioning.
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