Riskified works with customers across the full retail spectrum that are battling fraud and adopting risk management. Which innovations in the payment ecosystem have contributed to your amazing growth (250% CAGR over the past five years)?
It’s less innovations in the payment ecosystem and more innovations in eCommerce overall that have contributed to our growth. As shopping has moved online, we’ve seen two big shifts that make Riskified an invaluable tool for merchants.
First – fraudsters have moved online, and their tactics have increased in sophistication. It’s extremely hard for merchants to stay on top of fraud while focusing on their core business.
We’ve been successful because we’ve specialized.
The second big shift is the change in consumer expectations. Not too long ago a consumer would place an order to be delivered to their home and expect to wait a while to receive it. As eCommerce grew more competitive, merchants improved their offerings, and now consumers have a higher level of expectation. That means merchants need to offer things like buy-online-pick-up-in-store, delivery to lockers and same day shipping to be competitive. They have to offer digital gift cards and international delivery. And doing so exposes them to risk and increases the technical requirements of assessing orders quickly. Our ability to deliver instant, accurate decisions helps them make good on their consumer promise, and that’s been key to our success.
You have recently announced a $165 million Funding round. What are the Growth milestones on your roadmap?
This was a significant funding round for Riskified, but we did it from a position of strength. We have had excellent growth in the business over the last five years. We exceeded $100m in ARR as early as 2018, and we are hovering around profitability. So, in terms of growth milestones, our focus is on continuing to grow the business, expanding our product lines and increasing our geographic coverage.
Riskifed’s NYC office was recently chosen as one of the coolest tech spaces and the TLV office as one of the most desirable works places in the city.
How do you maintain this great vibe while growing to over 400 employees worldwide?
We take a lot of pride in creating a welcoming place to work where everyone can be as comfortable as possible. Our offices in New York and Tel Aviv are in great locations and really thoughtfully designed. We really try to listen to our employees and give them what they need to do their work well and feel at home here.
But I think a big part of what makes Riskified such a great place to work is the people in those offices. Who we have as colleagues is crucial to how you experience your workplace. It’s extremely important that we hire people who fit in with our values, want to contribute and with whom we want to spend time. It’s easy to lose sight of that when you’re growing how we’ve grown, but we’ve made it a priority to focus on hiring the right people.
What was the Inflection Point in Riskified’s history?
Our inflection point happened early on. My co-founder Assaf and I believed that existing fraud solutions were under-engineered and merchants were losing out on revenue as a result. We felt that a sophisticated, machine-learning solution could do the job much better than what was in the market. But first we had to help merchants understand that they had a problem. For our early clients we reviewed the orders they believed were fraudulent and were planning to decline. We safely approved 30-70% of those orders, helping merchants complete sales that would have otherwise been turned away. With that, we shifted the conversation from preventing fraud to increasing revenue. We were built to be revenue maximizing from the start, so achieving that change in mindset made our value clear. We began reviewing higher volumes for larger merchants, and we developed products and solutions that increase our merchants’ revenue. That continues to be our focus, and it’s made us the company we are today.
What do you miss most in an early stage company?
I miss knowing everything – or nearly everything – that was going on with the company. At the same time, I now have a team that I can trust with those same decisions.
Toughest choice you had to make as a CEO
Whether to stay in Tel Aviv or relocate to New York. This was both a personal and a life decision, but moving away from what had been our base of operations and trusting that it would continue to run smoothly was a very difficult choice.
Gut instinct and cold data, which do you follow?
I tend to look to the data. There are some decisions where the data is pretty evenly balanced, and listening to your gut may tip you in one direction or the other, but I generally follow the numbers. That’s what Riskified is. We’re built on the premise that looking at the data is going to lead to more accurate decisions.
Where do you invest most of your time?
It’s hard to pick just one, but I’m primarily focused on our strategic direction. We’ve been successful, but we can’t get complacent. Most of my time goes to making sure we’re well positioned for where the industry and eCommerce as a whole are headed. That said, I still make sure that I’m spending a lot of time with our clients and prospects. Knowing where they’re focused helps keep us moving in the right direction.
What characterizes your executive team?
Our executive team is a lot like Riskified itself – quietly competent. As a company we try to be the behind-the-scenes tool that lets merchants do whatever they need to focus on sales and growth. Our executive team is a lot like that, too. It’s a group of very high performers with strong opinions but not strong personalities. We collaborate really well, treat each other with respect and work to give our teams everything they need. And then we let them go do it.
How do you see your personal growth alongside the company’s?
It’s impossible to overstate how much of a growth experience this has been. When Assaf – my cofounder – and I started this, we began with a very small core team as we built the product. When you’re leading a team of 5 people, you’re doing everything – product design, client service, accounting, tech support. When you’re leading a multi-office, billion-dollar company with 450 employees, your role is completely different. I’ve been CEO from the start, but I feel like I’ve held at least a dozen different positions within the company.
All those different roles have taught me and made me a better leader. Some of it is industry specific, like how to serve our clients or run a deal. Some of those lessons come from leading a company growing at the rate ours has, like how to raise funds or how to negotiate many, many leases. And some of it is internal, like learning how to recognize and deploy talented people. It’s been an amazing experience.
Best tip you got?
Hire smart, capable people with whom you’d like to spend time. When we hire and promote at Riskified we focus on ability over resume.
Tip you wish you had gotten?
Get a very thorough inspection before you sign the lease. Our New York office is a beautiful place to work, but it’s an old building, and we’ve dealt with some issues as a result. One of the things no one tells you when you start a company is that eventually you’ll be in the real estate business…
About Riskified
Riskified helps the ecommerce industry realize its full potential by making it universally safe, accessible and economic. The world’s largest brands – from airlines to luxury fashion houses to gift card marketplaces – trust us to increase revenue, manage risk and enhance their customer experience. Merchants lose billions of dollars to legacy fraud solutions, payment failures, high-friction verification methods and more. Riskified uses powerful machine-learning algorithms to recognize legitimate customers and keep them moving toward conversion.