German-Israeli Anti-Fraud Startup Closes $14M Funding Round

German-Israeli startup Fraugster announced last week that it raised $14 million in a Series B funding round led by CommerzVentures, the venture capital subsidiary of Commerzbank, and early investors Earlybird, Speedinvest, Seedcamp and Rancilio Cube. Munich Re / HSB Ventures, the venture capital arm of the global reinsurer Munich Re, also participated in the round.

Fraugster was founded in 2014 by Max Laemmle, who previously co-founded payment gateway company Better Payment, and Chen Zamir, who has spent more than a decade in different analytics and risk management roles including five years at PayPal.

Based in Berlin, the company developed proprietary AI-based software that helps online merchants and retailers tackle fraud, by taking data from multiple sources, analyzing and cross-checking it in a fraction of a second to determine whether a transaction is fraudulent or not.

Fraugster says it currently monitors millions of transactions and works with clients that include payment service providers Ingenico ePayments and Six Payments.

“Our technology is constantly improving and adapting to new fraud trends as they emerge around the world,” said Fraugster founder and CEO Max Laemmle in a statement. “We are protecting our clients from the risk of fraud and also giving them a significant revenue uplift because we’re reducing the number of genuine transactions that are erroneously blocked.”

Stefan Tirtey, managing partner at CommerzVentures, said: “Fraud is a huge problem for e-commerce. Fraugster helps merchants to concentrate on selling, while reducing fraud and increasing conversion rates.”

Fraugster will use the new investment to continue its expansion into new markets, including the US, Asia, and Europe.