CUNA Mutual Group said Wednesday it has invested in a Chicago-based financial anti-fraud technology startup, participating in Rippleshot, Inc.’s $2.6 million Seed 2 round.
KDWC Ventures was the lead investor in the funding for Rippleshot, which provides transaction monitoring and fraud detection technology for financial institutions, processors and merchants.
Madison, Wis.-based CUNA Mutual Group’s investment was made through the venture capital entity it formed last year: CMFG Ventures, LLC.
“Payment fraud detection and prevention are extremely important to credit unions,” said Brian Kaas, CMFG Ventures’ president and managing director. “Leveraging new technology, like Rippleshot has developed, will make it easier to detect and prevent payment fraud in a way that will protect members and strengthen credit unions for the long term.”
Rippleshot’s software uses machine learning and big data to identify potential payment card breaches at all types of merchants. It highlights payment cards that are most likely to see fraudulent activity and enables users to subsequently prescribe which transactions to decline using real-time decision rules.
“Mitigating payment fraud through transaction monitoring and card reissuance is a challenge, particularly in small and medium-sized financial institutions, like credit unions. Resources are limited, and small-scale breaches can easily go undetected, creating significant liability for the institutions,” said Canh Tran, Rippleshot’s founder and CEO. “Our Sonar technology aggregates data from millions of payment card transactions to provide smaller institutions with an efficient and effective system for targeting and preventing payment fraud.”
CMFG Ventures typically makes initial investments of $1 million to $5 million in technology companies that can support credit unions. Other investments have been in Align Income Share Funding (formerly Cumulus Funding), Chicago; Forevercar, Chicago; SmartAsset, New York City and Springboard Auto, Irvine, Calif.
Chicago-based KDWC Ventures typically invests $1 million to $10 million in startups with monthly recurring revenue, referenceable customers and scalable technology platforms.
