Start-up that uses A.I. to detect fraud phone calls with '99.995%' accuracy raises $90 million
Vijay Balasubramaniyan, co-founder, chief executive officer and chief technology officer of Pindrop.
Security start-up Pindrop has raised $90 million from investors including Vitruvian Partners andGoldman Sachs.
The seven-year-old firm, which uses artificial intelligence (AI) technology to detect fraudulent phone calls, said Wednesday that it would use the latest funding to boost its European expansion plans.
Vitruvian, a European private equity firm that has invested in the likes ofJust Eat and Farfetch, led the funding round, while Goldman Sachs and Singapore's corporate investment arm EDBI were among new investors that backed the deal.
The company is also backed by Google parentAlphabet,Citigroup and Silicon Valley venture capital stalwart Andreessen Horowitz.
Atlanta, Georgia-based Pindrop uses machine-learning technology that is fed large amounts of data to learn the difference between a legitimate and fraudulent phone call.
Pindrop says its tech can analyze 1,380 features of a voice from a phone call to help identify information such as the caller's location and what type of phone they're using, creating what it calls a "phoneprint." Currently, it analyzes about 650 million calls a year, and expects that number to increase to 1.1 billion by the end of 2018.
Vijay Balasubramaniyan, Pindrop's co-founder, chief executive officer and chief technology officer, said the firm's accuracy when it comes to detecting fraudulent phone calls is around "99.995 percent," adding that it has caught roughly $350 million worth of fraud attempts this year alone.
IPO in sights
Balasubramaniyan said he sees an initial public offering (IPO) down the line for the company, citing the 137 percent increase in its revenue over the past three years.
"If the world is moving to voice and we're providing all of security and identity for voice, I think we'll be a very valuable public company, so absolutely that's where we're headed," he told CNBC in an interview Wednesday.
As for profitability, Pindrop's boss said he expects the firm to be cash flow positive by the first quarter of 2019 — that expectation doesn't account for the latest injection of capital from investors, he added. It then sees itself achieving earnings before interest, tax, depreciation and amortization (EBITDA) profitability by Q2 2019 and sustained free cash flow and EBITDA profitability by Q3 2019.
The Series D investment, which marks Pindrop's fourth major round of funding, will go toward expanding the firm's operations toBritain,Ireland andFrance, and will also fund its drive into the internet-of-things (IOT) industry.
Pindrop is looking to expand its enterprise solutions to focus on new areas like voice-activated speakers, smart locks and connected cars, using its experience analyzing voice interactions to provide voice recognition technology.
Security firmAllegion, whose venture arm also participated in Pindrop's latest funding round, will use Pindrop's technology for its voice-powered devices, as part of a strategic partnership with the firm.
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