Socure to Acquire Effectiv for $136M

INCLINE VILLAGE, Nevada – October 24, 2024 – Socure, the leading provider of artificial intelligence for digital identity verification, fraud prevention and sanction screening, has signed an agreement to acquire Effectiv, a real-time risk decisioning company, for $136M. The acquisition is expected to close in November.

This strategic acquisition pairs Socure’s best-in-class digital identity verification and fraud solutions with a developer-friendly AI orchestration and decisions platform – a combination of technology not held by a single competitor, and one that will elevate the way the market combats fraud and verifies identities across the entire customer journey.

Effectiv’s open platform seamlessly integrates any risk solution, including identity and payment fraud controls, credit underwriting, Know Your Business (KYB) and anti-money laundering (AML), to drive real-time decisions that solve the toughest risk challenges of our time – identity theft, account takeover, scams, and real-time payment fraud.

With this acquisition, Socure – which serves more than 2,700 customers and has verified more than 2.26B identities over the past 12 months – further solidifies its leadership position in the identity verification and fraud prevention market, and is propelled into the $200B enterprise fraud industry, which additionally encompasses payments fraud, credit underwriting, and AML transaction monitoring.

The Effectiv Team – Fintech Veterans, Platform Experts

Effectiv was founded in early 2021 by Ravi Sandepudi, Ritesh Arora, Jonathan Doering, and Anupam Tarsauliya, fintech veterans who previously built risk platforms for industry giants like PayPal, Google, and Walmart. Socure first worked closely with the Effectiv founders during their time at Simility, a fraud platform that PayPal acquired for $120 million in 2018.

With the prior experience of having built multiple platforms as their guide, this battle-tested team designed, architected and built Effectiv for large enterprise scale and complexity from the start, delivering extremely low latency, high velocity, and complete flexibility.

The entire Effectiv team will join Socure, spearheading Socure’s platform product, engineering and data science innovation, as well as contributing immediately to its enterprise go-to-market strategy.

Synergies for Expanded Market Opportunities

A platform strategy is critical for Socure’s next growth phase. This acquisition will enable the company to deepen existing enterprise partnerships, while also expanding to more broadly serve the midmarket. Effectiv made early inroads selling into banks and fintechs, with many well-known names like Ouro/Netspend, Lightspeed Commerce, Cardless and Paycor. Financial services is also where Socure built its early business and with over 1,000 banks and 500+ fintech partnerships, the company expects to rapidly accelerate Effectiv’s commercial adoption.

Leveraging ‘Certainty in Identity’ to Combat Fraud and Improve UX at Every Customer Touchpoint

Stolen or compromised identities lie at the heart of nearly every fraud attack or scam. Socure has invested more than a decade in solving what is arguably the most difficult risk challenge in the digital landscape – saying ‘yes’ to more never-before-seen consumers at onboarding, while simultaneously deterring the most complex fraud attacks, at a tremendous scale.

Innovation has centered on building a comprehensive portfolio of market-leading verification and fraud solutions that uniquely provide a 360-degree view of identity. With advanced AI and more than ten years of data and model training that includes over 3.5B known identities, delivering certainty in identity is the north star for Socure.

With the Effectiv platform, Socure will be able to orchestrate and write complex, combinatorial rules on its own solutions, along with those from third parties, that leverage this 360-degree view of identity. This unified approach of identity certainty automates risk and trust decisions beyond onboarding at login, authentication, payments, account changes, account recovery and regulatory filing from a single platform, with an adaptive, stateful view of the same identity at every touchpoint across the enterprise.

“As we attained identity certainty to stop attacks and ensure trust at new account opening, many large partners asked us ‘why not apply the same view of identity to login, payments, authentication, account recovery and regulatory reporting?’” said Socure founder and CEO Johnny Ayers.

“With a world-class platform from Effectiv and analytics that allows for adaptive and progressive risk decisioning, we will be able to help our partners with a single view of identity to drive instant risk and trust decisions anytime, anywhere.”

Modernizing Enterprise Fraud with a Unified View of Identity, Transactions and Accounts

Effectiv also introduces transaction-level solutions to Socure’s portfolio for the first time, including real-time payments fraud and AML transaction monitoring, which both require a platform built for unprecedented speed, scale and flexibility in analytics.

Historically, entire companies were built either ‘knowing’ identity or specializing in transaction anomaly detection, but failed to integrate the two, resulting in a massive financial crime blindspot. FinCEN reports that 42% of all suspicious activity related to transaction monitoring is a result of identity-related exploitations–indicating $212 billion in suspicious activity. The Socure-Effectiv integration ends this historical gap, opening the door to combat the most complex fraud, scams and AML challenges with a unified view of identity certainty, transaction attributes and account validation.

“Socure has uniquely built everything required to solve for new account opening at the identity level—arguably the hardest problem because it’s the first time you’ve seen the consumer,” explained Ravi Sandepudi, the CEO and co-founder of Effectiv who will become Head of Platform Products at Socure

“Now we can review and analyze the user’s risk profile across transactions and accounts over time, maintaining an up-to-date perspective which was impossible before.”

The platform also enables the ability to develop and import an enterprises’ own machine-learning models to support unlimited solution configurations inclusive of ingesting custom data – delivering the flexibility necessary to tackle fast-changing fraud attack patterns, and unique customer risk profiling across any industry.

“By joining Socure, we’re consolidating what have historically been entirely disparate solutions and views of trust and risk at each subsequent step of the customer journey—delivering significant value to the customers we serve,” added Ritesh Arora, the President and co-founder of Effectiv who will join as Head of Platform Solutioning at Socure.

An Open Platform With Immediate Revenue Impact

The Effectiv team has built an ecosystem of 50+ integrated third parties and has worked closely with Socure as one of their top identity and fraud partners. This lays the foundation for a rapid integration and commercial general availability within the next 45 days. Socure will continue to support their existing third-party providers while expecting to expand offerings rapidly and add many more partners globally to the platform.

“Socure’s acquisition of Effectiv expands the company’s capabilities beyond onboarding and identity verification to include full risk process optimization,” said Jim Mortensen, strategic advisor, fraud & AML at Datos Insights, which awarded Socure the 2024 Fraud & AML Impact Award for Best Digital Identity Verification Innovation.

“This acquisition allows Socure to offer a more comprehensive solution that enables organizations to consolidate their technology stacks and develop a more integrated approach to fraud prevention.”

About Socure

Socure is the leading AI provider of digital identity verification and fraud solutions. Its predictive analytics platform applies AI and machine learning techniques with trusted online, physical and offline data intelligence to verify identities and fraudulent transactions in real-time. The company has more than 2,700 customers across the financial services, government, gaming, healthcare, telecom, insurance, marketplaces, and e-commerce industries, including eighteen of the top twenty banks, the largest HR Payroll providers, the largest sportsbook operators, 27 states, four federal agencies and more than 500 fintechs. Organizations including Capital One, Citi, Chime, SoFi, Green Dot, Robinhood, Dave, Gusto, Public, Poshmark, Stash, DraftKings, PrizePicks and the State of California trust Socure for accurate and inclusive identity verification and fraud prevention. Learn more at socure.com.