Amsterdam-based Fraudio secures €2.7M to help companies fight financial crimes; here’s how


In this digital age, financial crime against banks and other financial services institutions are accelerating rapidly. Hence, there is a growing demand for fraud detection solutions.

As a result, the integration of fraud detection systems with AI, machine learning, and analytical technologies is expected to boom market growth in the coming years.  

According to the report from Fortune Business Insights, the global fraud detection and prevention market size is projected to reach $106.71B (approx €87.8B) by 2027 at a CAGR of 24.4 per cent. 

At present, many firms have emerged with analytics-based fraud solutions in the market, not only for financial companies but across various industries. 

Based out of Amsterdam, Fraudio is one such startup. The fintech startup focuses on helping companies in the payment ecosystem to fight payment fraud and financial crime through AI, machine learning, and multi-dataset network effects. 

Raised €2.7M

Recently, the Fraudio raised $3.3M (approx €2.7M) funding in Seed round from the founders of fintech companies Stone and SaltPay. 

Other investors, including BiG Start Ventures, BYND Venture Capital, as well as the founders of Viva Wallet, ComplyAdvantage, and VOLT, and experts from the payments and cybersecurity industries, also participated. 

The company will use the funding to accelerate its growth and develop its product. 

Combating fraud detection 

Founded by João Moura and Nathan Trousdell, Fraudio team has spent two years building a cloud-native centralised AI and machine learning payment fraud detection solution. 

The solution can be used by payment service providers (PSPs), acquirers, issuers, processors, card schemes, and even large merchants who run their checkout or gateway.

Fraudio says it aims to take over from the rules-based fraud prevention systems still prevalent today. 

“We worked in the payment industry for many years and became so frustrated with the options available for fraud detection that we decided to build our solution. In a blind test by the risk department at the PSP and acquirer, we were at our solution effectively controlled fraud while causing 40 per cent fewer false positives than one of the top vendors in the world. This was a vendor that charged six figures just for a proof of concept and then took half a year to implement it. We thought, hang on, why should companies make that kind of commitment before knowing if it’s any good? There must be a better way,” says CEO and Co-Founder João Moura.

Leveraging on AI 

The Amsterdam-based company offers the latest fraud detection tools by leveraging proprietary and patented AI tech with a robust network effect. 

Furthermore, Fraudio provides products that can be accessed from a single platform – payment fraud detection, merchant-initiated fraud detection (for PSPs and acquirers), and money laundering detection.  

This allows customers to maintain conversion rates while reducing the direct and indirect cost of fraud – maximising revenue.

“The long project timelines and the prohibitive costs of testing solutions were identified by Gartner as a major frustration in the industry. We don’t charge customers before they see value from our solution. We do this by offering what we call proof-of-results free of charge. This allows companies to see the real results of our product in a week or less. Between that and our simple API integration, we believe we are offering something really unique and compelling. Our current customers are very happy with the quick integration time and product performance”, he adds. 

Fraudio works with customers including Viva Wallet, Borgun, Novalnet, PagueloFacil, and other undisclosed customers in Europe, North America, Latin America, and Asia.

“Some of our customers are quite private about using our platform, as they believe it gives them an edge in their local market, which we have to respect,” says COO and Co-Founder, Fraudio, Nathan Trousdell. 

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