Fraud protection company Rippleshot aims for bigger clients
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JOHN R. BOEHMRippleshot co-founder Canh Tran
Rippleshot
A fraud protection company for banks, credit unions and retailers
THE COMPANY: "Virtually every single breach you heard about last year, we've known about it weeks ahead of time," says Kaleigh Simmons, the marketing manager at Rippleshot. Her boss, co-founder and CEO Canh Tran, had worked in the fraud detection industry for more than a decade when a large credit card company approached him in 2010 with a problem: Half of all credit card fraud stemmed from data breaches, and that percentage was growing rapidly. Tran and his team developed an algorithm that determines the common point of purchase among compromised cards. Rippleshot's portal then sends out alerts so clients—banks, credit unions and retailers—can shut fraud down quickly.
Launched in early 2013, Rippleshot received an $800,000 round of seed funding from Chicago investment banker Dick Kiphart's KCG Capital. Today, the 13-person company is cash-positive (Tran declines to provide exact revenue) and has clients in four states. Rippleshot's "bread and butter" clients are credit union and small banks because they have limited in-house fraud protection and are hit with a disproportionate amount of the crime. (Data from small and midsized institutions sell for more on the black market than data from a Chase or Citi card—thieves know they won't be detected as quickly.) But Rippleshot wants to gain traction with bigger players. It just inked a deal with Mastercard. But it isn't clear how to keep that momentum going.
THE RECOMMENDATION: Before, Rippleshot's marketing approach was to wax rhapsodically about the technology's details. But after meeting with a marketing team comprising of reps from Payless ShoeSource, United Airlines and U.S. Cellular, a new strategy emerged. The company needs to stress brand protection. It also needs to partner with middlemen that have established relationships with Fortune 500 contacts to get in front of top executives.
THE RESULT: Simmons is compiling a list of third-party companies that sell data and operations tools to big clients.
THE BOTTOM LINE: Rippleshot should partner with a third party that has relationships with Fortune 500 companies.