Statista recorded a global digital population of over 4.4 billion as of 2019. The increasing Internet yields space for frauds, which inversely breeds a new market for anti-fraud companies like NextData, who just announced new financing.
A lock on a laptop. Image credit: TheDigitalWay/Pixabay
The risk management company NextData (数美科技) delivers risk management solutions for enterprises via monitoring of cyber activities and identification of suspicious traits. The company closed its Series C financing today, worth USD 73 million and led by Tencent and Xianghe Capital (襄禾资本).
As new investors of NextData, Tencent and Xianghe Capital jointly invested with old shareholders Shunwei Capital, Baidu Ventures and Crystal Stream Capital (清流资本). The Series C financing raised the company’s post valuation to over USD 360 million, as estimated by ITjuzi.
The tech-savvy founding team of NextData share similar backgrounds to its stakeholders Qihoo 360, Shunwei Capital and Baidu Ventures. The tech-savvy management team shows that the company is driven by tech, with the core competencies clustered around cybersecurity and risk management.
Founder and CEO Tang Huijun (唐会军)
- President of Baidu Tech Committee;
- Senior Engineering Director of Qihoo 360, a top-ranked company that specialized in data and cybersecurity fields;
- With over a decade of data tech and management experience, he founded NextData to provide anti-fraud and risk management services to enterprises in 2015.
CTO Liang Kun (梁堃)
- Senior Engineer at Baidu;
- System architect at Xiaomi, whose founder Lei Jun (雷军) is the founder of Shunwei Capital – the shareholder of NextData;
President Liu Shuanlin (刘拴林)
- Chief Architect at Baidu;
- VP of Engineering at Alibaba.
Among companies that provide similar services, most founders are senior experts in data science and risk management. The founding team of Feedzai, a California-based company specialized in risk management and fraud detection, is a small alumni union of Carnegie Mellon University, the cradle of machine learning and artificial intelligence. Feedzai has raised more than USD 77.5 million over the past several years. There were once other similar-sized competitors, like iovation and Simility, who were acquired by financial companies TransUnion and Paypal respectively.
Cybersecurity addresses concerns that go beyond data leakage. For enterprises, cyberattacks and fraud may bring unexpected losses and threaten the life of their business. Big tech companies may have enough resources to build their own internal risk management team while SMEs have to seek external services. NextData and other anti-fraud risk management service providers identify risks via graphic, semantic, voice and other types of recognition and analysis. For instance, by detecting unusual transaction activities and misleading content whether in character or picture format, the company will receive alarms to prevent risks from happening. Anti-fraud companies can also implement firewalls and other measures to help companies safeguard against breaches in security.
854 million people, or just over 62% of the total population in China, are Internet users, as reported by the CNNIC. For the US, over 89% of the total population were Internet users as counted in June 2019. The increasing Internet usage worldwide proportionally grows along with fraudulent online behavior, including but not limited to cyberattacks, money laundering, etc. This yields increasing opportunities for anti-fraud and risk management businesses.