CertifID, a startup specializing in fraud prevention technology for the real estate market, has secured $20 million in funding in a recent round led by Arthur Ventures. The funding came at a valuation that is more than double its previous value, highlighting the demand for its products that combat wire fraud in the industry.
Key Takeaway
Real estate wire fraud is a growing problem, with criminals exploiting email accounts to conduct fraudulent transactions. CertifID, a startup specializing in fraud prevention tech, has raised $20 million in funding to combat this issue. Its platform offers tools for title agents, real estate law firms, and individuals to protect against wire fraud, including insurance coverage and identity verification processes. With the new funding, CertifID aims to enhance its products and meet the rising demand in the market.
Combating the Rising Threat of Wire Fraud
Wire fraud is a major concern in real estate transactions, with criminals resorting to tactics like hacking into email accounts to gain access to sensitive information. These fraudsters often pose as legitimate representatives from financial institutions and send fraudulent wire transfer instructions to potential homebuyers.
With over 13,000 people falling victim to wire fraud in the real estate and rental sector in 2020, resulting in losses of over $213 million, according to FBI data, the need for effective solutions has become paramount.
From Personal Experience to a Reliable Solution
The catalyst behind CertifID’s creation was the personal experience of its co-founder, Thomas Cronkright, who lost $180,000 to fraud at his own real estate title agency in Michigan. Since then, he has joined forces with Tyler Adams, a former lead product manager at BCG’s corporate investment and incubation division, to develop a platform that protects home buyers, sellers, and real estate businesses from this form of cybercrime.
“The real estate industry is facing a wire fraud problem that has accelerated significantly in recent years,” says Tyler Adams, who now serves as CertifID’s CEO. “CertifID was created to help create a world without wire fraud.”
Tools to Combat Wire Fraud
CertifID offers a range of tools to mitigate the risks associated with wire fraud. For title agents and real estate law firms, the platform handles transactions and provides insurance coverage of up to $1 million for every money transfer. Additionally, home buyers can acquire a money protection plan for added coverage, while home sellers are required to go through an identity verification process and provide banking information to prevent fraud attempts.
CertifID’s payment disbursement and identity verification processes are powered by a rules-based engine and an AI model trained on internally vetted data. The platform evaluates multiple fraud indicators while incorporating new data points to stay ahead of evolving fraud tactics.
“We believe automation and AI have incredible potential in the market,” Adams comments. “But we also recognize that fraud and abuse of trust often leverage the human factors of technology. That is why we take a human-centered approach to the problem of fraud.”
Scaling to Meet Growing Demand
With the new funding injection, CertifID aims to further develop its products and scale its operations to meet the increasing demand. The company already boasts several hundred title and real estate business customers and has established partnerships with federal law enforcement agencies to aid in fraud recovery efforts.
Despite the challenges posed by the housing market downturn and the ongoing pandemic, CertifID has experienced a surge in demand for its products and services. Fraud continues to increase, making anti-fraud technology an essential investment. With many players in the real estate industry yet to adopt such technology, CertifID expects significant growth in the future.
