Trustev gets funding boost at Web Summit

Irish fraud prevention firm Trustev kicked off the Web Summit by announcing its had raised $3 million (€2.2m) in funding to finance its expansion in the US.

The company, which provides real-time identity verification to help reduce ecommerce fraud, announced the investment on the main stage.

Trustev said it will expand its Irish operations to support the venture, growing to 20 people before Christmas. It currently employs 15 people, with its main engineering operation located here. It also plans to open a sales office in the US.

The funding is Europe’s largest seed round.

Cofounder Pat Phelan said it was a big move for the firm. “It will drive out growth quickly,” he said.

The company, which was co-founded by Mr Phelan and Chris Kennedy in 2012, is headquartered in Cork. It uses social fingerprinting technology, analysing data from sources such as Facebook, Twitter and LinkedIn that assigns a "trust score" and determines if the transaction should go ahead. Online fraud costs retailers an estimated $20 billion every year, with a report by CyberSource claiming that $3.4 billion was lost by retailers to fraud in 2011 in North America alone.

Earlier this year, Trustev was named as the top technology startup in Europe, overall winner at the Global technology Leaders Summit in San Francisco, and also one of the 30 global finalists at Techcrunch Disrupt NY 2013.

The deal is the first announced on the stage at the Web Summit, which takes place today and tomorrow in the RDS, Dublin. The event opened this morning with words from cofounder Paddy Cosgrave, who began the event with Daire Hickey and David Kelly in 2010.

“In three short years, 36 months, we’ve come incredibly far, incredibly fast,” Mr Cosgrave told more than 2,000 people, who packed into the main stage hall to hear the opening speeches. “The summit is flat; there are no hierarchies here.”

More than 10,000 people are expected to walk through the doors of the RDS to take part in the summit, with billionaire CEOs rubbing shoulders with small Irish startups over the course of the event.

First to the stage today was Saul Klein of Index Ventures, who urged both entrepreneurs and backers alike to take risks to reap rewards. Describing entrepreneurship as “the new rock and roll” and “hard work”, he gave some startling statistics. In the US, 55 per cent of venture capital investments are written off. In Europe, that figure is 62 per cent.

However, the capital that survives in the US has backed businesses that now account for 21 per cent of US gross domestic product, serving one billion customer, creating 440,00 jobs and generating more than $1.4 trillion in new market value.

“The notion that innovation creates economic value is a given at this point,” Mr Klein said.

“Politicians love innovation. It’s a cheap coat of paint you can put on the economy. Given the evidence, shouldn’t we be willing to take more radical risk?

And that 62 per cent was not a bad figure, he said. In contrast, the acceptable loss ration for large banks is a lot lower, at 2 per cent.

“If you’re not pushing for 62 per cent risk, you’re not trying hard enough,” he said.

He urged people to “shoot for the moon”, noting that unemployment in Europe meant there was a generation with nothing to lose.

“Aim too high. The prize is huge,” he said.