Spade: The Real-Time Data Infrastructure That Combats Card Fraud

Spade Founders

By Kabir Kumar, John Onwualu, Matt Kelly

We’re very excited to announce that we’ve led the $10M Series A round for Spade, a company that is emerging as the leading provider of real-time merchant intelligence for the payment ecosystem that can meaningfully change the nature of fraud mitigation.

Two billion credit card transactions are processed every day on payment infrastructure that hasn’t changed much since the 1960s. When a card transaction is initiated, digital payment data is sent through the networks, but industry data regulations are such that many key pieces of information are lost in translation. Consequently, both issuers and merchants are forced to make decisions based on incomplete data. This keeps the door open for many types of fraud with ultimately huge consequences for both consumers and merchants – merchants can spend up to $4 on mitigation for every dollar a consumer loses.

Since our inception, Flourish has been keenly focused on evolving the financial infrastructure to build a fair finance system for all. We’ve made 16 investments in banking infrastructure including companies such as Alloy, Hummingbird and TrueBiz. Financial crime and fraud mitigation are important components of this infrastructure. In recent years, the nature and scope of payment fraud has expanded with novel forms, while the solutions financial providers and networks use to respond to them are decidedly archaic and are forever catching up. As payments become more instant, more global and with newer players, smarter fraud models will be needed but they will be only as strong as the underlying data. 

We met Spade’s CEO, Oban MacTavish, a year ago and were fortunate to stay connected as he, and his co-founders Cooper Hart and Tess Bloch, refined their product and found meaningful traction in the market. Spade’s solution provides real-time merchant intelligence via a ground-truth database that links any card transaction to a real merchant identity, providing granular merchant, category and geolocation information. When a card is swiped or typed, the payment data runs through Spade’s APIs in real time. Where other data enrichment solutions take up to two seconds to return results, Spade enriches a transaction in <50 milliseconds 99% of the time. This critical time savings allows issuers to use Spade in the authorization flow where fraud models applied on Spade’s data yield meaningful uplift. The company’s data and speed also enable a variety of innovative features (e.g., spend controls) that require payment authorization. 

Spade’s early market traction is impressive and they have acquired dozens of well-known customers during the past 18 months. As examples, Mercury, Sardine, Ramp and Unit ran head-to-head vendor reviews and chose Spade because of its ability to improve their data to authorize more transactions, create innovative card products and enhance fraud detection. 

We believe that Spade has the team, leading-edge technology and business model to achieve significant scale. Top-tier banks dedicate considerable resources to in-house fraud prevention with the majority focused on understanding the consumer involved in a transaction. Spade fills a significant gap with its intelligence offering, serving issuing banks and credit unions that are increasing their fraud prevention efforts. The changing interest rate environment, different from the last 12 years, puts pressure on all participants in the card ecosystem to reduce fraud.

Spade is on the path to become a core digital infrastructure layer embedded within payment flows. As early-stage purpose-driven fintech investors, we believe that Spade can evolve the financial infrastructure and help us build a fair financial system. We are so excited to partner with innovative co-founders Oban, Tess and Cooper, as well as co-investors a16z, Gradient Ventures, Y Combinator, Dash Fund and Everywhere Ventures (The Fund).

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