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Digital Identity Leader Combate à Fraude Raises BRL 80 Million

Ethoca Co-Founder Darryl Green takes over as CEO and leads series A investment in the Brazilian startup

Shortly after Canadian Darryl Green reached an agreement with Mastercard to sell Ethoca, an e-commerce fraud-fighting startup he co-founded that was operating in 40+ countries, he fulfilled an agreement he made with his Brazilian wife to move to São Paulo.

With the capital raised in the sale, Green became a venture capital investor. His first choice was  Mutual — a consumer credit fintech that reconnected him with his anti-fraud technology roots. At Mutual, Green met Leonardo Rebitte — an entrepreneur who was searching for a way to verify customers' digital identity without resorting to overpriced or inefficient products. With no viable options, the Brazilian decided to create his own solution at home.

The tool was soon being used by a myriad of fintechs, and thus was born Combate à Fraude (CAF) – a digital identity startup that has just raised BRL 80 million in a series A round led by Green and the other founders of Ethoca (André Edelbrock and Trevor Clarke). But, the Canadian didn't stop at investing in the company. At the invitation of Rebitte, he also became CAF’s CEO.

In addition to Green's industry know-how and network, which made it easy to build a team of industry experts, the Canadian's presence helped attract a list of well-known investors. These include Kevin Efrusy, James Peck (CEO of NielsenIQ), and Andrew Prozes (former president of legal data firm LexisNexis).

"If there’s someone better equipped than I to be the CEO, it makes perfect sense to bring him in," said the founder of CAF. To Pipeline, Green said that Rebitte is one of the brightest individuals he has worked with in the commercial area, with a unique and thorough attention to customer relationships, adding "Our job now is to scale globally."

Headquartered in Venâncio Aires, Rio Grande do Sul, CAF is still concentrated in Brazil — where it serves clients such as Magazine Luiza, Cora, iFood, Linker (digital bank sold to Omie). That said, their international expansion has already begun, with the initial focus being the United Kingdom, Mexico, Canada and the United States.

The technology developed by CAF helps fintechs verify the identity of customers when creating accounts – it’s the engine behind those screens that ask for selfies, videos and photos of your ID. Rebitte argues that his solution is much more flexible than competitors, offering an unparalleled level of customization.

But CAF faces a competitive market. Unico is a leading competitor that recently raised $100 million in a round that valued the unicorn at $2.6 billion. Another competitor is Idwall, a recipient of funds from Monashees, GGV, Qualcomm and ONEVC.

At a time of layoffs, where access to capital in the startup environment is difficult, CAF is going against the grain. With the capital raised the startup will hire another 100 people, taking the team to more than 350. "Here at CAF, it's 'layon'", says the CEO.

The CEO of CAF argues that the funds raised – a round whose origins reach back to December — are more than what’s necessary to carry out the startup's expansion plans in Brazil and abroad. The round, by the way, is an indication of the solo path that the startup wants to follow. Rebitte has already turned down two offers to sell the company (from a major retailer and an anti-fraud firm).

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