Introducing Riskified ($RSKD)

“AI is about predicting the future.”
“We think AI really is the future.” — Dave Girouard, CEO Upstart.


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.


Riskified ($RSKD) 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.

It seems that people are very fond of the CEO and the culture at Riskified.…

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.
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

Brian Feroldi video
Company fact sheet…


I’m very interested in this company after the success of UPST but there is one thing that prevents me to jump in is their chargeback guarantee. They are very confident in their AI, which is a good thing but it also is a big risk. They earn a tiny amount of money from a transaction but have to pay the whole transaction if the chargeback occurs.
Could you find any more detail on the % of the chargeback cases the company has been paying so far? I hope that number is low and trending down.


Thanks for bringing this to the board, Pavlos21. I have a very small, 1.7% position in Riskified, but my confidence is growing. What sold me is the obvious benefit to every single merchant (much like my thesis for Global-e Online, GLBE, which is now 7% of my portfolio).

As I understand them, they are basically the Upstart of e-Commerce. “Hey, merchants! You’re losing a ton of money because people try to buy your goods online and their credit card is denied for stupid reasons. We’ll sort out the real fraud and let the ones who are legit through by using our AI. You’ll get all those sales that you’re missing right now. Moreover, we’re so confident in our ability that we’ll cover any real fraud that slips through our fingers. And you know those chargebacks from the credit card companies? When a customer orders a backpack and then tells the credit company it was unauthorized or says they never got the merchandise and you’re out the goods and the money both? If it turns out to be fraud, we’ll cover that, too.”

Here’s another article on them from two years ago when they were a private company: It’s notable that, while they’re a SaaS company, they only charge fees when the service to review a transaction is used. Merchants don’t have to run every transaction through Riskified. That tells me they care about their customers (the merchants) and want them to do well.

Brian Feroldi led me to this one (as he did to GLBE), and Pavlos21 has linked to that. He also brought it to one of the Hunt for 10x shows. Since my math skills would embarrass a third grader, I am very interested to see what those who can really dive deep into the numbers have to say about this new stock on the block.


Hi Pavlos,

Interesting company. Some tidbits: they grew topline in 2020 at 30% compared to 2019 (not level of hyper-growth). Accelerating to 54% in Q1 (51m). They guide for around 55.7m in Q2 - it’s 47% yoy and 9% qoq. Hopefully, they will beat it and grow 50%+ as this would show acceleration of their business in 2021 compared to not so great growth in 2020.


  1. They have significant customer concentration
    “We derive a significant portion of our revenues from a few significant merchants, each of which operates in the eCommerce retail sector. For the years ended December 31, 2019 and 2020, our three largest merchants in the aggregate accounted for 45% and 36% of our revenues, respectively. In addition, our five largest merchants in aggregate accounted for approximately 55% and 46% of our revenues for the years ended December 31, 2019 and 2020, respectively. For the three months ended March 31, 2020 and 2021, our three largest merchants in the aggregate accounted for 37% and 35% of our revenues, respectively. In addition, our five largest merchants in aggregate accounted for approximately 48% and 45% of our revenues for the three months ended March 31, 2020 and 2021, respectively.”

  2. They have a fast growing competitor, Signifyd, which already have a published app for Shopify with 153 reviews:
    (unlike - which seems somehow to be there, but not published yet)

“Signifyd doubled revenue year over year — expects to hit a $200M revenue run rate in the next year.”- From…

Riskified 2020 revenue was $169.7.

Signifyd co-founder Michael Liberty was the Head of Digital Goods and Platform Risk at PayPal.
Second co-founder, Rajesh Ramanand, led Emerging Markets Risk at PayPal, responsible for managing fraud and credit risk in Latin America, the Middle East and Africa.


Re: Signifyd and Riskified in Shopify App Store. A quick search on Shopify forums says that as of 4 years ago Riskified was on Shopify App Store but has pulled out since:…

Not sure why.

This type of business seems to rely on networking effects as one large customer can significantly boost growth and revenue (grow with your customer) due to GPV processed e.g. Affirm with the Amazon deal. Interesting company and thanks for the discussion.


re:Re: Signifyd and Riskified in Shopify App Store. A quick search on Shopify forums says that as of 4 years ago Riskified was on Shopify App Store but has pulled out since:…

Not sure why.

from the prospectus

"Our ability to help our merchants stems from the fact that we continuously feed this real-time training data into our sophisticated machine learning models. We service merchants of all sizes, from multi-billion dollar global omnichannel retailers to small pure play merchants on Shopify. However, we focus on supporting enterprise merchants, which we define as merchants generating over $75 million in online sales per year. Our merchants include some of the largest eCommerce brands in the world, including Wayfair, Macy’s, and StockX. Our merchants operate in a variety of verticals, including multiline retail and marketplaces, travel, fashion, digital goods, and luxury. "

some other tidbits

We allow merchants to generate higher revenues by increasing their approval rates for online transactions. Our platform can increase merchant sales approval rates by, in some cases, more than 20%.

Our platform automatically identifies and rejects fraudulent online transactions that would result in unnecessary expenses for our merchants. We also assume the cost of fraudulent transactions if they are approved. Net of our fees, our platform can reduce these costs for our merchants, in some cases, by more than 60%.



I consider the fact that they have a fast-growing competitor a good thing at this point. Means the space is legit, in demand. With a sub 10B market cap they don’t need to be top dogg to win from here.


“total Class A ordinary shares and Class B ordinary shares (collectively, “ordinary shares”) to be outstanding after this offering 157,625,498 ordinary shares (or 160,250,498 ordinary shares if the underwriters exercise in full their opinion to purchase additional ordinary shares).”

I get a marketcap of 51Billion. (157 million shares * 33 share price) = ~51 billion.

At sub 10billion this is a steal. At 51 billion and a TTM of ~188 million it might still be good but that is an EV/S around 27. I’m not sure we know enough at that price. I’m just starting to read through stuff



Accidently added a zero. 5 billion marker cap.

This may be a fine little company, but I just don’t see how it qualifies for the type of fast-growth company we look for here. Keep in mind, it is a small company that’s been around for at least 8 years. One would hope that at this size, its growth would be consistently larger. Despite its uninspiring growth rate, it has a fairly high EV/S of 27. In table form, here are some numbers going back several years.

Q1'21  Q4  Q3  Q2  TTM  Q1'20  Q4  Q3  Q2  Q1'19  Q4																		
 51    57  42  38  $188   33   36  39  30    30   31																		
-10%   7%  10% 14%	  -9%  -7% 29%  0%    1%																				
YoY change 54% 
Gross Profit Margin 	
Q1'21  Q4     Q3     Q2    Q1'20  Q4  Q3  Q2  Q1'19	
56%    58%    53%    53%   53%    51  45% 48% 57%