Cybersecurity startup Deduce Inc. today announced that it has raised $9 million in new funding to launch its generative AI identity fraud solution and help it scale up to prevent identity fraud across multiple industries.

Founded in 2019, Deduce offers a platform designed to protect businesses and their customers from unauthorized account access, data leakage and identity fraud. The company’s platform uses risk algorithms and behavioral analytics across a network of consumer identity data to eliminate fraud in real time. The platform is also designed to prevent artificial intelligence-generated identity fraud.

Deduce argues that the rise of generative AI has accelerated efficiency across industries, including organized fraud, with the introduction of platforms such as FraudGPT. Using AI, criminal actors can and are leveraging leverage AI and stolen personally identifiable information to create batches of credible digital identities, authenticate those identities with deep fake biometrics and create online transactional histories.

Detecting AI-generated identities is said to require an identity graph that sees the vast majority of the online U.S. population several times each week. Deduce leverages multi-contextual activity-backed intelligence to help organizations identify fake AI-generated identities during account opening and “sleeper” identities already onboarded.

Deduce’s platform uses multi-contextual intelligence to gather and analyze extensive real-time data from diverse sources to recognize identity patterns and flag the digital forensics patterns created by AI-generated fraud. With those patterns, Deduce can recognize unusual behavior in otherwise normal-looking identities and flag them for review.

“We stand at a critical juncture where the security and privacy of our most important data is being threatened at an unprecedented level,” Ari Jacoby, chief executive officer of Deduce, said ahead of the funding news. “Legacy fraud prevention methods will no longer be able to protect us from AI-generated fraud. Leveraging this new investment, we can take our solution to the market with the speed necessary to prevent this type of fraud from overtaking the organizations we serve.”

Freestyle Capital Management LLC led the Series B round, with Foundry Group LLC and True Ventures Management LLC also participating. Including the new round, Deduce has raised $27.3 million to date, according to data from CB Insights.

Image: Deduce