The share price of Israeli e-commerce fraud protection platform company Riskified (NYSE: RSKD) ended its first day of trading on Wall Street up 23.81% at $26, giving a market cap of $4.08 billion. On Wednesday, the company had priced its IPO at $21 per share, above the previously announced range of $18-$20.
Riskified, founded in 2012 by CEO Eido Gal and CTO Assaf Feldman, has developed a platform based on artificial intelligence, which according to the company allows merchants selling online to immediately and precisely distinguish between legitimate and fraudulent customers and thus reduce costs and risks. Riskified's core product Chargeback Guarantee automatically approves or blocks online transactions. The company has 650 employees including 450 employees in Israel.
After the IPO, Gal told "Globes," "From our point of view, the offering has been an event that has given us excellent positioning, which can help us in business development. We are the first company in our category that has gone out and told the public market the value that we are creating for our customers. We save them 39% of costs and at the same time raise their sales by 8%. All this is through the full automation of the process. We believe that this will help us to accelerate and capture the remaining customers in the market. We did not go for the IPO because we needed cash and we didn't need any immediate capital."
Riskified raised $363 million, which could grow by an additional $55.1 million, if the underwriters exercise their options within 30 days at the IPO price. At the same time, Feldman sold 200,000 shares for $4.2 million but still holds shares worth $283 million, while Gal will holds shares worth $278 million (at the IPO price). Other major shareholders include Genesis ($648 million), General Atlantic ($333 million), Qumra Capital ($233 million), Pitango Growth ($194 million), and Fidelity ($175 million).
Gal said, "Putting it in a simple way, what we are doing is that every time somebody buys online, you need to know if they have a genuine or stolen or fake credit card. Every merchant would build an internal system but we offer this process as a service for merchants as an end-to-end solution, including machine learning and cybersecurity."
"The intention is not to be a tool that is used but conduct the entire process. We have built the world's most sophisticated system for doing this. The more customers that join, the more data that we have and we can be even smarter and provide our customers with more value, and for sure more than every individual merchant."
In addition to its core product, Riskified is developing more services including a product that solves the problem of fraud surrounding items returned to the vendor. For example a customer who orders a product, receives it but claims it was never delivered and demands a refund. Another product will provide a security solution that ensures there will not be any attempt to steal credit card details or loyalty club points. Another product will allow a customer whose transaction has not been approved but has been identified as a legitimate customer, to complete the deal.
Published by Globes, Israel business news - en.globes.co.il - on July 30, 2021
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