CMFG Ventures, LLC, the venture capital arm of CUNA Mutual Group, announced its investment in Rippleshot, Inc., a Chicago-based financial technology startup that provides transaction monitoring and fraud detection technology for financial institutions, processors, and merchants. Led by KDWC Ventures, CMFG Ventures’ investment was part of Rippleshot’s $2.6 million Seed 2 round.
“Payment fraud detection and prevention are extremely important to credit unions,” comments Brian Kaas, president and managing director, CMFG Ventures. “Leveraging new technology, like Rippleshot has developed, will make it easier to detect and prevent payment fraud in a way that will protect members and strengthen credit unions for the long term.”
Machine Learning and Big Data
Rippleshot’s software uses machine learning and big data to identify potential payment card breaches at all types of merchants, according to a CMFG statement. The technology highlights payment cards that are most likely to be associated with fraudulent activity and enables users to subsequently prescribe which transactions to decline using real-time decision rules.
“Mitigating payment fraud through transaction monitoring and card reissuance is a challenge, particularly in small and medium sized financial institutions, like credit unions,” comments Canh Tran, founder and CEO, Rippleshot. “Resources are limited, and small-scale breaches can easily go undetected, creating significant liability for the institutions. Our Sonar technology aggregates data from millions of payment card transactions to provide smaller institutions with an efficient and effective system for targeting and preventing payment fraud.”
CMFG Ventures describes its activities as engaging and evaluating startup investments that best support credit unions in serving their members with new and innovative technology products and services. CMFG Ventures’ investment strategy targets startups focusing on data and analytics, consumer lending and asset protection technology, and advanced mobile channels. CMFG Ventures has invested in a number of startup companies, including ForeverCar, SpringboardAuto.com, Align Income Fund Sharing, CUneXus, and SmartAsset.