Pindrop Security announced Feb. 19 that it has raised $35 million in a Series B round of funding, which will be used to help advance Pindrop’s efforts to secure against the risks of phone fraud.
The Series B round was led by Institutional Venture Partners (IVP) and included the participation of Andreessen Horowitz, Citi Ventures, Felicis Ventures, Redpoint Ventures and Webb Investment Network. To date, Pindrop has raised $47 million in funding, which includes $11 million in a June 2013 Series A round of funding and $1 million in seed financing back in 2012.
Pindrop Security’s technology is all about helping to identify and prevent phone-based hacking fraud.
“We have seen massive demand, and we didn’t need the money really since our customers are paying us nice size amounts, but looking at the demand across verticals and geographies, we figured it’s a great time to go grab it all,” Vijay Balasubramaniyan, co-founder, CEO and CTO of Pindrop Security, told eWEEK. “In order to expand and build new products, we needed a big size funding round.”
Pindrop’s primary product is an anti-fraud solution for call centers that detects anomalies in a call that could be an indication of potential fraudulent activity. Pindrop’s phoneprinting technology, much like fingerprinting, can help to uniquely identify users and limit fraud risks, according to Balasubramaniyan. With a phoneprint, it is possible to identify that the right person is calling from a known device and from their usual location.
Pindrop licenses its phone fraud detection platform based on the number of phone calls that are analyzed by a customer, with most agreements being multiyear ones that include recurring revenue potential.
Looking forward, Balasubramaniyan said Pindrop will be investing in research and development to expand the platform’s capabilities. The challenge of maintaining user privacy is one area in which Pindrop will continue to invest. Another area will be research in actively profiling and understanding how phone fraud hacker groups operate and what they are doing.
“We’re seeing a wide variety of attacks on the voice channel, so a lot of research is going into completely understanding what the fraudsters are doing and how vulnerable the voice channel actually is,” he said.
From a go-to-market perspective, Balasubramaniyan explained that Pindrop has multiple channels today, including telcos, that are leveraging the technology as a new form of security-enhanced Caller ID.
“Telcos are starting to resell our technology to call centers, and they are able to win new lines of business as a result,” he said. “The telcos are saying that they used to provide Caller ID, and now with Pindrop they are providing a new form of secure Caller ID that makes sure that calls are actually legitimate.”
Beyond just call center opportunities, Balasubramaniyan said there is the future opportunity for the Pindrop technology to be used by individual consumers as well.
An initial public offering (IPO) could be in Pindrop’s future. “We can look at every single voice interaction and provide security, trust and identity,” Balasubramaniyan said. “With that kind of new security paradigm, we think there is a very large opportunity, and that opportunity translates to us becoming a very viable public business.”
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.