FraudSciences, which develops fraud detection and
protection products, registered its first sales
at the end of 2006.
Israeli fraud detection software start-up
FraudSciences Corp. has been acquired by eBay
Inc. (Nasdaq: EBAY) subsidiary PayPal for $169
million. FraudSciences, which was founded in
2001, raised $7 million from BRM Capital, which
holds a 40% stake, angel investor Guy Gamzu, and
Redpoint Ventures of the US. The company, which
had its first sales at the end of 2006, will
remain in Israel and become PayPal's local R&D
center.
FraudSciences began marketing its products about
a year ago. The company was founded by chief
scientist Saar Wilf and CTO Shvat Shaked. Wilf
was formerly CFO at online payment solutions
provider Trivnet Ltd. and has extensive
experience in the field. Shaked, also a former
Trivnet executive is an expert in e-commerce,
web-based information security, and software and
telecommunications systems. He owns patents on a
series of user identification, electronic
payment, and fraud detection technologies. Both
founders served in classified technology
divisions in the Israeli army.
Wilf and Shaked said that we have been given a
rare opportunity to work with an exceptional
group of talented people.
Sources report that Wilf and Shaked will receive
$20 million each following the acquisition. BRM
has made a handsome twelve fold return on its
investment making almost $70 million on an
investment of $5 million.
This will be eBay's second Israeli acquisition,
after it bought out Shopping.com in 2005, whose
system provides price comparison solutions, for
$634 million.