Welcoming Arkose Labs to the M12 portfolio

By James Wu

I’m excited to welcome Arkose Labs — a fraud and abuse prevention platform, to protect web and mobile apps — to the M12 portfolio.

In an increasingly digital world where success is measured by Monthly Active Users (MAU) and Daily Active Users (DAU), online traffic is a critical performance indicator. Unfortunately, not all online traffic is created equal. The internet has become a hotbed of global cybercrime as financial transactions and exchanges of personally identifiable information become commonplace.

Cybercrime is on the rise because fraud is a well-funded global operation fueled by deep knowledge sharing and sophisticated tools and resources. Year over year, fraud grows in frequency, size and complexity. Fraudsters have long been playing a cat and mouse game with digital businesses, rapidly bypassing their defenses and evolving tactics to maximize the ROI of cybercrime. Because profitability is the goal for purveyors of fraud and abuse, we are investing a technology that is focused on breaking the business model of fraudsters.

Since its founding, Arkose Labs has been thinking about fraud and abuse defense a little differently. Arkose’s mission is to upend the fraud economy by introducing friction to fraud operations and — as a result — diminish their efficiency and financial returns. The more time and resources fraudsters and bots deplete trying to bypass Arkose challenges, the less time they spend wreaking havoc on Arkose customers.

Arkose Labs provides an end-to-end anti-fraud platform that delivers high fidelity detection and prevention with its flagship products: Arkose Detect and Arkose Enforce. Arkose Detect — the risk engine — unearths patterns across devices and networks in real-time for behavioral analytics and anomaly detection. Suspicious traffic will immediately trigger Arkose’s enforcement layer.

Arkose Enforce is a challenge-response mechanism that works in conjunction with Arkose Detect to authenticate unrecognized requests. Unlike legacy technology, Arkose Enforce is adaptive and purpose-built for fraud prevention; it learns from past attacks and adapts as Arkose encounters innovative attack schemes.

Above and beyond the business opportunity, the user experience of Arkose piqued our interest. Arkose introduces both game design (Arkose Labs founder, Matthew Ford, was a game designer) and security principles — two seemingly unrelated disciplines — into its product. By design, good users are intended to intuitively solve the challenges (such as rotating an animal onto its feet) with ease while stumping bots and fraud rings.

Arkose Labs’s Enforcement Challenge as it appears on Microsoft.com. One of the features of Arkose Labs is that the look and feel mimics the website it protects.

Arkose’s solution is a light deployment that seamlessly integrates with customers’ existing infrastructure and protects against a wide variety of industry-specific and business-critical use cases, including: account takeover, new account fraud, fake reviews, gift card fraud, scalping and spam.

As companies experience fraud at unprecedented scale, Arkose customers — including product teams at Microsoft, GitHub, and Electronic Arts — are adopting Arkose to protect assets and reduce fraudulent activity. Arkose protects EA gamers from bot-led abuse of its in-game economy. Microsoft Outlook issues an Arkose challenge when a user attempts to send spam. GitHub uses Arkose at the point of registration to verify authenticity of sign ups. Fraud prevention is not for the faint-hearted, but Arkose provides 100% service-level-agreements (SLAs) to prevent inauthentic requests at scale to demonstrate a strong commitment to its customers.

The product speaks for itself, but what really sets this company apart is the incredible team at Arkose Labs. Arkose founders, Kevin Gosschalk (CEO) and Matthew Ford (VP of Product), and their leadership team boast phenomenal experiences combating fraud. When M12 met the team, it was clear that customer-centricity and enthusiasm for Arkose’s mission permeated throughout the organization. CISOs and fraud teams dream of the day when bots and abuse in the online world dwindle to zero. Until then, we’re excited to be working with a preeminent organization making strides against the fraud economy.

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Microsoft’s Venture Fund

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