- Customer growth accelerated across all industries, led by fintech, retail/ecommerce, and travel segments
- Strong financial performance and significant company milestones were achieved; demand from global enterprises surged for its fraud prevention and account security platform
- Global fraud detection and prevention market is projected to grow from $26.97 billion in 2021 to $141.75 billion in 2028, with a CAGR of 26.7%
- Analytics firm GlobalData listed the company as a future cybersecurity industry unicorn
Arkose Labs, the global leader in fraud deterrence and account security, announced today full year 2021 performance results and key milestones, including doubling revenue year-over-year. Other achievements during the year included global expansion, strategic hires, product innovations, as well as notable award recognitions. The results reflect enterprises’ intensifying need for the company’s products to combat the pace at which account-focused fraud attacks occur.
“I’m incredibly proud of the teamwork that occurred in 2021 because the threat landscape veered sharply and aimed squarely at consumer accounts, a trend that is here to stay for all industries,” said Arkose Labs Founder and CEO Kevin Gosschalk. “Account takeovers, credential stuffing attacks, and new types of account login fraud accelerated throughout the year, and companies responded by selecting our technology, which is purpose-built for these types of attacks.”
Strong Customer Traction
Pent-up demand for long-term deterrence based on a defense-in-depth approach fueled company growth.
Total ARR doubled year-over-year by expanding the company’s existing customer base and landing several new customer deals across diversified segments, including emerging fintech disruptors. The company realized gains in all industry sectors led by 360% growth in the fintech segment and 160% growth in both retail and travel segments.
Arkose Labs provides support for some of the world’s most recognized brands and platforms, including Digital Ocean, Honey, LinkedIn, Microsoft, PayPal, Pitney Bowes, Roblox, Venmo, and Zilch. It covers industries, including financial services, fintech, gaming, retail, technology and social media, representing more than 1 billion social media users, 60% of online video gamers, and 40% of all retail volume.
Additionally, with GitLab and others in this sector as customers, Arkose Labs helps protect the largest amount of code in existence, ensuring a safer internet overall.
Throughout the year, existing customers added services, as they recognized increased value from company products, and new customers onboarded after successful proof-of-concept trial periods.
Arkose Labs’ growth underscores the need for a platform that customers can rely on for immediate reduction in fraud attacks, especially volumetric attacks from bots that can come up quickly, overloading businesses.
“PayPal’s suite of brands, including Honey and Venmo, is built on the trust of our consumers, and we take all steps to prevent fraud and abuse on an ongoing basis,” said Assaf Keren, VP, Enterprise Cyber Security and Chief Information Security Officer at PayPal. “By collaborating with Arkose Labs, we continue to advance security and vigilance to a new level where merchants and consumers alike have even more confidence their transactions are safe.”
Strategic Hires and Global Offices
Arkose Labs bolstered its executive ranks with proven leaders who are known for scaling teams and companies for successful outcomes. New hires include Ashish Jain (Chief Product Officer), Richard Dufty (Chief Revenue Officer) and Joe Hsy (CTO), while Vanita Pandey (CMO), Patrice Boffa (Chief Customer Officer), and Phil Steffora (Chief Security Officer) were recognized with promotions to the C-level.
The company opened offices in Sydney, Tokyo, London, and San Jose, Costa Rica to support its growing customer base. Amidst a tight 2021 labor market, the company attracted and onboarded top employees with experiences that tightly align to the growth trajectory of the company and who have deep domain prowess.
World’s First Credential Stuffing Warranty
Arkose Labs is reinventing the world of fraud prevention by undermining the economics of fraud. In October, Arkose Labs announced the world’s first and only warranty for credential stuffing attacks. The fact that real credentials are used in these attacks, make credential stuffing the most difficult type of fraud for companies to detect and prevent. The Arkose Labs Credential Stuffing Warranty protects businesses up to $1 million from the varied costs associated with hacked accounts.
The warranty is a clarion call for the cybersecurity industry. Most cybersecurity vendors operate on a “best efforts” basis with no guarantees or SLAs on their product’s effectiveness to mitigate threats. “That approach is simply not good enough for customers, consumers or the cybersecurity industry,” Gosschalk said. “Our hope is that our warranty will encourage other vendors to step up and demonstrate the same level of confidence in their technology by offering similar guarantees.”
Product Innovation for the Shifting Threat Landscape
“The pandemic has accelerated everything digital including fraud, and the online account is a top target,” says David Mattei, Strategic Advisor at Aite-Novarica Group. “Account takeover, perpetrated at scale via credential stuffing bots, remains a persistent and constant attack vector across many industries. In a recent survey of financial institutions, 34% of fraud executives report that account takeover has increased by 10% or more from the first half of 2020 to the first half of 2021. And a survey of fintech firms in the U.S. and U.K. found that credential stuffing prevention is one of the top 3 tools used to protect consumers’ digital accounts.”
Significant product innovation and advancements took place during 2021, leading to the launch of capabilities like device profiling, behavior biometrics, and machine learning to detect not only large-scale bot attacks but also human provoked attacks. Arkose Labs now owns 22 patents, covering its novel technology and reflecting its commitment to ongoing research and development.
The growth in customers led to an increase in transactions analyzed and the identification of new attack types. The Arkose Labs Fraud Deterrence Platform analyzed over 150 billion requests across 254 countries and territories in 2021. The landscape dramatically changed with the annual attack rate doubling over the previous year, driven by a surge in attacks in the financial services, retail, technology, and travel segments.
The platform protects against automated bot and human-driven account takeover and new account fraud attempts. It also prevents an extensive list of abuse use cases such as inventory hoarding, web scraping, in-game abuse, carding, fake reviews and spam by eliminating malicious activity across digital platforms.
In 2021, out of all traffic monitored across the Arkose Labs network, 21% was an attack.
Marketplace Takes Notice
Arkose Labs completed a $70 million Series C fundraising round in the spring of 2021, which was led by SoftBank Vision Fund 2 with participation from Wells Fargo Strategic Capital and previous investors M12 and PayPal Ventures, bringing its total capital raised to $114 million. Monies were deployed to accelerate product roadmap innovation, including research and development, go-to-market strategy, office openings, and hiring across the company.
The company’s three-year 2,010% growth rate captured attention. It is the no. 1 fastest-growing North American company in the fraud prevention and account security category. Deloitte ranked Arkose Labs on its Fast500 list as the 83rd fastest-growing company in North America and the 23rd fastest-growing company in the San Francisco Bay Area, which has the largest concentration of high-growth companies. Arkose Labs debuted at 195th on the overall Inc. 5000 roster and 5th in the security industry ranking of the magazine’s list of the fastest-growing privately held companies to watch. Fast Company honored Arkose Labs in its “Next Big Things in Tech” award program as the winner in the Data & AI category for foiling human fraudsters and malicious bot attacks.
2022 Outlook is Bright
The company’s achievements this past year position the business to perform even better in 2022. “The wind is at our backs,” said Gosschalk. “Our technology and the pending innovations we’re preparing to unleash in the New Year will change the game not just for customers but, most especially, for unrelenting fraudsters.”
The company’s achievements this past year position the business to perform even better in 2022. “The wind is at our backs,” said Gosschalk. “Our technology and the pending innovations we’re preparing to unleash in the New Year will change the game not just for customers but, most especially, for unrelenting fraudsters.”
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