This Singaporean startup closed its series A today, but went global long before that

The CashShield team. Photo credit: CashShield.

When Justin Lie approached clients in 2011 with his cyber security solution, he faced raised eyebrows and quizzical looks. Back then, the concept of automation using machine learning had nowhere near the draw it has today. Fast-forward to 2017 and his startup CashShield has clients all over the world, with three international offices and a fourth on the way – plus it’s profitable and growing rapidly.

At the time, machine learning sounded ridiculous.

The Singapore-based company started out as CashRun in the late 2000s, after co-founder and CEO Lie’s own websites were hit by credit card fraud. Even as a teen, Lie had been making websites to sell items on eBay. Coming face to face with the problem of fraudulent transactions, he thought of an automated way to track down and flag illicit behavior.

Lie successfully tested the initial product with a gaming company in Germany. Then it was time for the hard part: develop and refine the technology, and convince clients of its value.

“Imagine pitching to clients that machine learning was going to solve all their problems and they would no longer need humans to look at transactions manually. At the time it sounded ridiculous,” he tells Tech in Asia.

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CashShield uses machine learning to track user behavior patterns on websites that involve financial transactions, like ecommerce stores. The startup has developed its own software from scratch with real-time pattern recognition and passive biometric analytics capabilities (where the subject doesn’t know the identification process is happening).

These impressive-sounding phrases mean the system can detect patterns in, for example, mouse movements and typing speed or in devices being used, in order to distinguish between legitimate and fraudulent users.

If such behavior is detected, the system rejects the transaction automatically, with no need for human input.

The data it gathers helps protect clients from payment fraud, fake account creation, account takeovers, and promo abuse (when fraudsters create new accounts in bulk to exploit sign-up incentives). The startup is so confident in its automated system’s effectiveness that it offers a 100-percent chargeback guarantee in case of failure – meaning it will reimburse its clients for fraudulent transactions that break through its defenses.

It took CashShield five years to research and refine its tech, but the time spent helped cement the company’s competitive advantage. “If you look at a lot of AI or machine learning tools, they are usually built around a common framework,” Lie says. “So a lot of solutions end up looking pretty alike.”

The startup has been rewarded for its efforts with big-name clients all over the world, which allowed it to secure “billions in gross merchandise volume” and become profitable very quickly. The list includes companies like Razer, Alibaba, Square Enix, T-Mobile, and Vodafone. It opened offices in Berlin, Jakarta, and Shanghai, funding operations largely out of its own pocket.

While Lie doesn’t reveal specific figures, he says CashShield has been seeing a 200-percent growth rate in revenue every year and has increased the contracts it has signed by 1000 percent in the past 12 months.

Until recently it has been able to forge ahead without worrying about external funding, meaning it could be picky when it came to external investors. More than funds, it needed go-to-market expertise and strategic partners that could help it grow further.

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