Socure, an artificial intelligence (AI) provider for digital identity verification, fraud prevention, and sanction screening, has agreed to acquire real-time risk decisioning company Effectiv in a deal worth $136m.
Through the proposed deal, Socure aims to enhance its digital identity verification and fraud solutions by integrating them with Effectiv’s developer-friendly AI orchestration and decision-making platform.
The combined technologies aim to revolutionise the way market combats fraud and verifies identities throughout the customer journey.
Established in 2021, Effectiv offers an open platform that consolidates various risk solutions, including identity and payment fraud controls, credit underwriting, know your business (KYB), and anti-money laundering (AML) processes.
This platform is designed to drive real-time decisions that address major risk challenges such as identity theft, account takeover, scams, and real-time payment fraud.
Effectiv has established a robust ecosystem of over 50 integrated third-party partners itself as a key player in the identity and fraud sector.
The firm’s founders have also collaborated with Socure on the former’s previous venture Simility, a fraud platform that PayPal acquired for $120m in 2018.
Effectiv has made inroads into the banking and fintech sectors, securing partnerships with clients such as Ouro/Netspend, Lightspeed Commerce, Cardless, and Paycor. Socure, with more than 1,000 banks and over 500 fintech partnerships, anticipates rapid commercial adoption of Effectiv’s solutions.
Effectiv CEO and co-founder Ravi Sandepudi said: “Socure has uniquely built everything required to solve for new account opening at the identity level—arguably the hardest problem because it’s the first time you’ve seen the consumer.
“Now we can review and analyse the user’s risk profile across transactions and accounts over time, maintaining an up-to-date perspective which was impossible before.”
The acquisition of Effectiv is also expected to enable Socure to reinforce its leadership in the identity verification and fraud prevention market. Currently, Socure serves over 2,700 clients and has verified over 2.26 billion identities in the past year.
Besides, the integration of Effectiv’s platform will allow Socure to apply complex, combinatorial rules on its own and third-party solutions, leveraging a comprehensive view of identity.
This unified approach aims to automate risk and trust decisions across various touchpoints, including onboarding, authentication, account recovery payments, account changes, and regulatory filings.
Furthermore, the acquisition introduces transaction-level solutions to Socure’s offerings, such as real-time payments fraud detection and AML transaction monitoring, which require rapid, scalable, and flexible analytics capabilities.
Socure founder and CEO Johnny Ayers said: “As we attained identity certainty to stop attacks and ensure trust at new account opening, many large partners asked us ‘why not apply the same view of identity to login, payments, authentication, account recovery and regulatory reporting?
“With a world-class platform from Effectiv and analytics that allows for adaptive and progressive risk decisioning, we will be able to help our partners with a single view of identity to drive instant risk and trust decisions anytime, anywhere.”
Upon the closing of the deal, the entire team of Effectiv will join Socure, driving innovation in product development, engineering, and data science, while also contributing to Socure’s enterprise go-to-market strategy.
The acquisition is expected to be completed in November 2024.
