CertifID, a startup specializing in fraud prevention technology for the real estate sector, has announced today that it secured $20 million in funding in a round led by Arthur Ventures, valuing the company at more than double its previous valuation.
The genesis of CertifID dates back to 2017 when Thomas Cronkright, one of the startup’s co-founders, suffered a personal loss of $180,000 due to fraud at his real estate title agency in Grand Rapids, Michigan. The primary focus of CertifID’s products is combating wire fraud in real estate transactions, a growing concern.
In real estate-related wire fraud, criminals gain access to information about impending real estate closings by infiltrating email accounts, often those of prospective homeowners. They impersonate representatives of legitimate financial institutions and send fraudulent wire transfer instructions to homebuyers.
FBI data reveals that wire fraud victimized over 13,000 individuals in the real estate and rental sector in 2020, resulting in losses exceeding $213 million. This represented a staggering 380% increase since 2017.
Motivated by his personal experience, Cronkright partnered with Tyler Adams, a former lead product manager at BCG’s corporate investment and incubation division, to create a platform safeguarding homebuyers, home sellers, and real estate businesses from this form of cybercrime.
Tyler Adams, now serving as CertifID’s CEO, emphasized the gravity of the wire fraud issue: “The real estate industry is facing a wire fraud problem that has accelerated significantly in recent years. The FBI recently reported victim losses from real estate business email compromise increased 72% from 2020 to 2022… CertifID was created to help create a world without wire fraud.”
While the aspiration of a “world without wire fraud” may seem ambitious, CertifID does provide valuable tools to combat it. For title agents and real estate law firms, CertifID manages transactions and insures up to $1 million each time money changes hands. Homebuyers receive secure wiring instructions and have the option to purchase a money protection plan for added security. Home sellers are required to provide banking information and undergo identity verification to thwart fraud attempts.
Behind the scenes, CertifID employs a rules-based engine and an AI model trained on internally vetted data and expert decisions to power its payment disbursement and identity verification processes. This model assesses multiple fraud indicators and adapts as malicious actors devise new strategies.
Adams emphasized CertifID’s commitment to a human-centered approach to combating fraud, recognizing that technology, while powerful, can also be exploited by those seeking to abuse trust.
With this new funding, CertifID intends to bolster ongoing product development and expand operations to meet growing demand. The company claims to have “several hundred” title and real estate business customers and partnerships with federal law enforcement for fraud recovery efforts in cases where its verification software is not utilized.
To date, CertifID has raised over $40 million through a combination of equity and debt financing. Adams pointed out that despite market fluctuations, the demand for CertifID’s products and services has remained strong. Fraud has continued to rise, even during challenging times like the pandemic and economic crises, and is expected to persist. With the majority of the real estate industry yet to adopt anti-fraud technology, CertifID anticipates continued growth ahead.
