CertifID Raises $20M to Enhance Products Aimed at Preventing Wire Fraud

CertifID Secures $20 Million to Bolster Real Estate Fraud Prevention Technology

CertifID, a promising startup focused on developing fraud prevention technology for the real estate sector, has successfully raised $20 million in a funding round led by Arthur Ventures, more than doubling its previous valuation.

Founded in 2017 by Thomas Cronkright after a personal experience of losing $180,000 to fraud at his real estate title agency in Grand Rapids, Michigan, CertifID aims to combat wire fraud head-on.

Wire fraud in real estate often occurs when criminals infiltrate email accounts—frequently those of potential homeowners—to obtain details about upcoming closings. They then impersonate representatives from legitimate financial institutions and send homebuyers deceptive wire transfer instructions. According to FBI data, over 13,000 individuals fell victim to wire fraud in the real estate and rental sectors in 2020, with total losses exceeding $213 million—a staggering 380% increase since 2017.

In his efforts to tackle this growing issue, Cronkright partnered with Tyler Adams, former lead product manager at BCG’s corporate investment division. Together, they developed a platform designed to safeguard homebuyers, sellers, and real estate businesses from this pervasive form of cybercrime. “The real estate sector is grappling with a wire fraud crisis that has intensified in recent years,” noted Adams, now CEO of CertifID. He highlighted recent FBI reports indicating a 72% rise in losses from real estate business email compromise incidents between 2020 and 2022, stating, “CertifID was established to foster a world free from wire fraud.”

While achieving a completely fraud-free world may be an ambitious goal, CertifID provides valuable solutions to mitigate this risk. The startup offers a platform for title agents and real estate law firms, insuring transactions up to $1 million every time funds change hands. Homebuyers receive secure wiring instructions and have the option to purchase a money protection plan for added peace of mind. To bolster security, home sellers must submit their banking information and undergo an identity verification process designed to thwart fraudulent activities.

At the core of CertifID's operations is a robust rules-based engine paired with an AI model that relies on "internally vetted data," expert strategy, and decision reviews. This technology evaluates various risk indicators, continually updating its fraud detection capabilities as criminals adopt new tactics. “We believe that automation and AI possess immense potential in the market,” Adams remarked. “However, we also understand that fraud disproportionately exploits the human elements of technology, which is why we take a human-centered approach to addressing fraud.”

With the new funding, CertifID intends to enhance its product development and scale its operations to meet growing demand. The company currently boasts “several hundred” title and real estate business clients and maintains partnerships with federal law enforcement to assist in fraud recovery efforts, particularly in cases where its verification software is not deployed.

To date, CertifID has raised over $40 million in a combination of equity and debt financing. Despite challenges in the housing market, Adams emphasized that the demand for CertifID’s products and services has continued to rise. “Fraud has persisted throughout periods of crisis, including the pandemic, bank turmoil, and ongoing inflation and recession threats," he said. “As the majority of the real estate sector has yet to embrace anti-fraud technology, we anticipate sustained growth in the future.”