Not all online attacks involve hacking. Cybercriminals also exploit the public-facing features of services such as banking apps to carry out fraudulent transactions and other illicit activities, a threat that Shape Security Inc. is combating.

The Mountain View, California-based startup marked a major growth milestone this morning with the announcement that it has raised $51 million in new funding.

The investment was led by London-based C5 Capital with participation from Kleiner Perkins, Hewlett Packard Enterprise Co. and a few others. Shape Security claims it closed the round at a pre-money valuation of $1 billion.

The startup sells cloud services that protect companies’ applications from bad actors. Shape Security’s flagship product, Shape Defense, sniffs out bots and malicious users by carefully combing through the data trail they leave behind as they interact with an application.

Shape Defense looks at everything from account activity to the device a person uses to log into a service. It feeds this information to an array of machine learning algorithms that are capable of distinguishing a legitimate user from, say, a hacker logging in with stolen account credentials. The algorithms can detect much more subtle types of malicious activity as well, like if cyber criminals are trying to use an e-commerce company’s checkout page to validate stolen credit cards.

Shape Security’s other products serve more niche functions. Among them is a solution called API Defense, which protects application programming interfaces, and Blackfish, a service that can notify companies if hackers steal login credentials belonging to their users.

Across its products, Shape Security claims to protect more online accounts from fraud than all other competing providers combined. The startup boasts of having ended 2018 with a whopping 23,576% revenue growth rate. Its customers include retail brands such as Starbucks Corp., three of the five largest banks in the U.S. and half of the world’s top ten airlines.

The startup’s latest round, which brings the total raised to $183 million, comes a few months after one of its biggest venture-backed rivals, Virginia-based Distil Networks Inc., was acquired by cybersecurity giant Imperva Inc. for an undisclosed sum.

Gilad Bracha, a distinguished engineer at Shape Security, talked recently with John Furrier, co-host of theCUBE, SiliconANGLE’s video studio in Palo Alto, California:

Image: Pixabay