Arkose Labs looks to hit cybercriminals where it hurts with $70 million cash infusion

Cyber Security News

Arkose Labs CEO Kevin Gosschalk described the company’s end game as incentivizing cybercriminals to “get a job that’s legitimate.”

His words come as the online fraud and abuse prevention technology company announced this week $70 million in Series C funding, led by SoftBank Vision Fund 2. Wells Fargo Strategic Capital, as well as previous investors in M12 and PayPal Ventures are also participating in the fund. Total investment to date for Arkose is $114 million.

Kevin Gosschalk, Arkose Labs

“Our objective, ideally long term, is to basically disincentivize fraud to the point where [attackers] go get jobs,” Gosschalk said in an interview with SC Media.

Funds will filter in part to research and development, building upon the Arkose model of undermining economic drivers behind fraud until attackers opt out. Its platform approaches this through two components: risk classification of traffic – or classifying good and bad actors – and “adaptive friction,” which the company describes as ruining attackers’ ROI through interactive authentication challenges that simultaneously allow legitimate users to pass with ease.

Arkose analyzed more than 15 billion online sessions in 2020, stopped 4.6 billion attacks and “wasted 40 million hours of fraudsters’ time,” according to the company.

“As long as they can make money, they will figure out whatever they need to figure out to get around whatever technology you’re using,” Gosschalk said, explaining the benefit of cutting off attackers ability to profit.

Arkose counts e-commerce and financial services among its key markets, with Dropbox, Microsoft, PayPal, and Sony Interactive Entertainment among its customers. Gosschalk pointed to the gambling industry as another viable market.

“Where can fraudsters make the most money? Those kind of companies are obviously natural partners for Arkose,” he said.

Ultimately, however, “we’re not just doing this for the merchants,” Gosschalk added. “This is something that’s actually about improving quality of life globally in an interesting way.”

In addition to product development, Arkose will use the funds to expand the Arkose Lab team and potentially consider acquisition of what Gosschalk described as likeminded companies that will enable the company to “leapfrog some of that product innovation.”