PayPal has announced that it will be acquiring fraud prevention platform Simility for $120 million in cash.
Simility, which uses machine learning to monitor transactions across mobile, web and physical environments and evaluate the risk of fraud, was last valued at $52.8 million. It had raised $24.7 million in funding, from investors including PayPal (which claims it already owns 3% of the company) as well as Accel, the Valley Fund, Trinity Ventures and others.
Our vision for Simility was to create an adaptive risk management platform that empowers organizations operating in a digital world to manage an evolving fraud and risk landscape where data breaches are the new normal.
– Rahul Pangam, CEO and co-founder, Simility
“Digital commerce has exploded, and fraudsters have taken note, adapting and developing new methods to carry out their crimes,” said Bill Ready, PayPal’s chief operating officer. “PayPal has been at the forefront of developing innovative fraud prevention and risk management solutions for nearly 20 years, but until now, merchants haven’t been able to configure those solutions to manage the unique complexities of their businesses.”
“We are buying a company that provides great tools that merchants can use on their own,” he added.
“Our vision for Simility was to create an adaptive risk management platform that empowers organizations operating in a digital world to manage an evolving fraud and risk landscape where data breaches are the new normal,” said Rahul Pangam, co-founder and CEO of Simility. “We are excited to enter the next phase of our growth with PayPal and are thrilled to join them to help drive the next generation of payment and commerce solutions while scaling our business together.”
This is PayPal’s second major acquisition in a week, with the $400 million purchase of Hyperwallet having been announced just last Tuesday. Other recent acquisitions by PayPal include Jetlore and iZettle, as well as Swift Financial and TIO Networks last year.
According to a blog post by Ready on PayPal’s website, the series of acquisitions is “part of a concerted effort to strengthen the suite of services we can provide to merchants in order to become the one-stop solution for global commerce”.
Digital commerce has exploded, and fraudsters have taken note, adapting and developing new methods to carry out their crimes.
– Bill Ready, COO, PayPal
“We invested in Simility last year because we believe the company has a unique approach that goes beyond legacy, static rule-based fraud and risk offerings and puts control in merchants’ hands to offer increased protection in a mobile world,” said Ready. “With Simility’s capabilities and talent, we will accelerate our ability to provide merchants with transparency and control to manage the unique complexities of their businesses while improving fraud prevention.”
As part of the deal, which is expected to close in Q3 of this year, Simility CEO Rahul Pangam and the Simility team will be joining PayPal, reporting to Tushar Shah, VP of Enterprise Services Platforms. Simility’s tools will be extended to merchants using PayPal, many of whom are already using Simility – Bay/StubHub, OfferUp, Dick’s Sporting Goods and Rebtel are among the list of clients.
“Together with Simility, we will be able to put more control in the hands of our merchants to fight fraud while helping to make commerce experiences faster and more secure,” said Ready.