E-commerce tailwinds have propelled merchants to drive more and more of their revenue from online channels versus in-store. However, with a rise in e-commerce has also come a surge in digital fraud, which is estimated to cost merchants $22 billion per year, and possibly growing to $50 billion in the next three years. The problem many merchants face is that in the attempt to decrease fraud, legitimate transactions from new shoppers are declined, too. False declines frequently occur at the payment and bank-level, where merchants simply have no visibility into the decision-making process. As a result, they have no control over transaction approval as a customer checks out and these transaction issues can cost businesses up to 10% of their revenue.
When we met with Michael Reitblat, CEO and co-founder of Forter, we were inspired by the company’s momentum and vision to create a coalition of merchants, banks, and payment providers that fight fraud together. With this opportunity in mind, we’re excited to lead Forter’s Series E financing.
Forter has demonstrated the ability to fight fraud while also enabling enterprise merchants to increase the lifetime value of their online consumers to a level that’s unparalleled by competitors. The company has taken a unique approach to the market by establishing an ecosystem of trust across online merchants, banks, and payment providers to block fraud and give consumers the trust and convenience to shop freely, and its predictive fraud and research modeling add to its confidence per transaction.
Forter’s global data network now accounts for more than $200 billion in annual online transactions, and the technology processes 6,000 data points per transaction, protecting more than 800 million shoppers.
Forter’s decision-as-a-service platform is enabled by a deep data set and behavioral analysis, increasing merchant authentication rates materially while maintaining best-in-class accuracy rates. Hundreds of customers from travel to retail to technology use Forter’s solution, including Fiverr, Mattress Firm, Nordstrom, Delivery.com, Sephora, Adobe, Instacart, and many others.
In 2020 alone, Forter has reached cash flow breakeven and doubled both its revenue and team across eight global offices. With this $125 million investment, Forter will continue to invest in its platform and in its global presence. Bessemer’s growth practice is excited to join this journey.
“The market traction we have experienced allows us to invest even more into our platform and drive more significant impact for our customers and partners,” said Michael Reitblat, CEO and co-founder.
At Bessemer, we’re inspired to partner with ambitious leaders like Michael and the entire Forter team as they execute against their mission to secure online transactions and deliver merchants value.