South African startup Orca Fraud is a fraud orchestration platform which provides fraud and compliance tools to banks and fintechs, focusing on streamlining these functions using a single integration.
Founded in January by Thalia Pillay and Carla Wilby, Orca empowers fraud analysts and compliance officers at banks and fintechs with the tools they need to effectively combat various types of fraud.
“The rise in fraud and adoption of new digital financial offerings – e-wallets, mobile money, bank APIs, and crypto payments – make it increasingly difficult to effectively identify and prevent fraud from happening at scale. We provide targeted solutions to fraud in emerging markets, with tailored fraud models based on a company’s transactional data,” Pillay said.
Pillay and Wilby came up with the idea for Orca having worked in banking and fintech in South Africa for over a decade, and witnessing the need for modular, effective fraud and compliance tools.
“I’ve integrated with some of the best tools in the world and have suffered long integration times, lack of flexibility in the solution and high costs,” Pillay said.
“For most businesses in Africa, paying thousands of dollars a month on a fraud solution which has a high false positive rate feels unnecessary. We’ve found that fraud in emerging markets is different due to different payment methods and socio-economic climates. This leads to the user profiles of a fraudster being different which can often go undetected by solutions which aren’t built on and for local data.”
There are well-established players in the fraud prevention space, such as Sift, Seon, Sardine and ComplyAdvantage. Locally, competitors include Smile ID, but Pillay said most of them are focused on the KYC or onboarding journey.
“At Orca, we cover the entire user journey as monitoring user behaviour is a continuous process instead of a once-off action,” she said.
Initially self-funded, Orca last month raised a US$550,000 pre-seed round of funding, led by Norrsken22, with participation from First Circle Capital, Musha Ventures and Kara Ventures, as well as several strategic business angels and family and friends.
“We were fortunate enough to have a fair deal of investor interest after we launched in January and opted to raise earlier in our journey to allow us to focus on building and iterating with clients,” said Pillay.
“Running free pilots and design partnerships helps us overcome the classic cold-start problem. We need the resources to stay buoyant during these non-revenue generating times as we refine our product.”
Uptake has been “great”, she said.
“Fraud is one of those things that people are secretive about because it is such a sensitive topic. However, when we launched in January and announced our round last month, we had companies throughout the world reach out to share their fraud horror stories,” Pillay said.
“We initially thought it’d mainly be payment players, but various industries such as insurance, e-commerce, and universities have contacted us. There’s so many types of fraud out there and the majority of solutions don’t cater for things such as claims fraud or employee fraud.”
Given South Africa has some of the most diverse types of fraud, Orca remains heavily focused on its home market. That said, the team does not rule out eventual expansion.
“We previously looked into other markets such as Nigeria, Kenya and other SADC countries to ensure that whatever we build here is transferable in future,” said Pillay.
“A strategy that we’ve found works well for us is following our clients to where they operate. As they launch in new markets, we can help ensure they launch with minimal levels of fraud. We’ve seen a trend that new products invite new types of fraud so we really urge businesses to try to proactively protect their products before launching.”
Though it is currently offering free pilots and design partnerships in order to use clients’ data to refine its models, Orca will plans to switch to a paid model soon.
“We’ve timeboxed these free trial periods until the end of the year or until we are adding significant enough value to our clients that they are willing to pay for our products,” said Pillay.
For now, the ability to gather data from clients is vital.
“Data is hard to source in Africa. When you’re a machine learning business, data is your lifeblood,” Pillay said.
“When we started Orca, we thought AI and ML would be the things we build first. However the reality is, that at least in Africa, willingness to pay for tools which aren’t a real need is low at best. Innovation is less about the buzzwords you use and more about how effectively you solve real problems. For our industry and target market, real innovation is empowering businesses with the tools they need to fight fraud in a cost-effective manner.”
