“AI is about predicting the future.”
“We think AI really is the future.” — Dave Girouard, CEO Upstart.
Why?
As I completely agree with the above statements, I wanted to search for other legitimate companies that use AI/ML, who also stand behind their product/service, and have the numbers to back it up. Because almost every other business throws around fancy words like AI and ML but in reality, most of them are far from the truth.
Who?
Riskified ($RSKD) riskified.com prevents fraud and boosts sales for eCommerce businesses around the world by using AI and ML to predict who is a legitimate buyer and who is not. Riskified boosts sales by allowing more legitimate buyers to make a purchase. Riskified also cuts costs by reducing fraud. Guaranteed. Yes, they guarantee that their AI will not make a mistake so when/if there is a mistake they pay out of their own pocket. This is what I really like about Riskified. They stand behind their technology.
In their words: “We empower businesses to realize the full potential of eCommerce by making it safe, accessible, and frictionless.”
Riskified is a new IPO out of Israel (just like Monday and so many other newly-listed tech companies) with offices across the world including the US, Israel, Europe, Asia Pacific, and Latin America. https://www.riskified.com/careers/
It seems that people are very fond of the CEO and the culture at Riskified. https://www.glassdoor.com/Reviews/Riskified-New-York-City-Re…
Both the CEO/Founder and CO-Founder have skin in the game and own 17% (combined) of the company which shows that they have faith in what they do.
Even though Riskified is a recent IPO, the company is 8 years old now. They recently made a switch from being just a fraud prevention company to now protecting customers from malicious account takeover attacks, combat payment failures at checkout, help merchants block abuse while upholding consumer-friendly policies, and much more.
“Our global team helps the world’s most innovative eCommerce merchants eliminate risk and uncertainty from their business. We remain committed to expanding the transformative powers of commerce.”
The numbers
50% CAGR Revenue growth for 2018-2020. Now accelerating to 54% for 2021Q1. Expecting Q2 results on September 9.
1% Churn rate (99% annual dollar retention)
158% Net Dollar Retention Rate (excluding merchants for travel and tickets for 2020)
$170 million revenue for 2020
$60 billion GMV (gross merchandise volume) for 2020
650+ employees including 240+ for research and development. This shows they want to grow fast and spend a lot on research to improve their offering and add new products.
Gross margin improving from 50% to 55%. As the AI keeps getting better this should too improve.
Several top players are already customers like wish, farfetch, peloton, revolve, booking, agoda, and many more. https://www.riskified.com/customers/
Zero debt. Lots of cash.
Free Cash Flow positive.
Final Thoughts
Riskified seems to tick several boxes. I took a starter position (7%) and wait to see how well they executed this Q2 on September 9. I believe that risk is something that every business wants to and has to take care of without the legacy and outdated solutions available as of today. This is where Riskified comes into play. I like how they grow and add new products and services. I expect an increase in all metrics in the foreseeable future. This Q will tell how the story unfolds.
Useful Links
F-1 https://www.sec.gov/Archives/edgar/data/0001851112/000162828…
IR https://ir.riskified.com
Brian Feroldi video https://www.youtube.com/watch?v=wdyHh5UT84s
Company fact sheet https://ir.riskified.com/static-files/50e56352-9956-410d-99a…