Orca fraud raises $550K pre-seed to combat fraud in emerging markets
The 4-month-old startup aims to address the surge in fraud in emerging markets, exacerbated by new payment methods like mobile money and e-wallets.
South African startup, Orca fraud has today announced that it secured $550,000 in its pre-seed round led by Norrsken22.
South Africa's fraud landscape has steadily developed in the last five years. Citizens are not the only ones in the crossfire. Government bodies like its business registry and even a state-owned bank have recently experienced breaches to their systems.
In 2021, it was the most cyber-attacked country in Africa and third in the world, according to an Interpol African Cyberthreat Assessment report. Between 2018 and 2022, the amount of fraud incidents in the market increased by 600%, per the Southern African Fraud Prevention Service (SAFPS).
To help fight the growing menace, not just in South Africa but also in other emerging markets, Orca, founded in January 2024 by Thalia Pillay and Carla Wilby, is building a set of tools that analysts and compliance officers need to tackle various fraud types.
The Cape Town-based startup has raised $550,000 in an "oversubscribed" pre-seed round led by pan-African VC firm Norrsken22, with participation from First Circle Capital, Musha Ventures, Kara Ventures, business angels, family and friends. It will use the investment to build tailored fraud prevention tools and expand its all-female team.
Orca's play is helping financial institutions across Africa with effective, affordable cybersecurity solutions. The surge in fraud cases has made preventing them at scale a lot more cumbersome. The adoption of new paytechs—mobile money, cross-border payments, and e-wallets—has opened up new, large-scale fraud avenues.
On May 21, 2023, the Development Bank of Southern Africa was hit with a ransomware attack that stole sensitive info; its actors threatened to publish them unless given a ransom. Similar incidences have rocked the South African Reserve Bank and the Central Bank of Lesotho.
The firm claims to have interacted with more than 150 fraud professionals and fintech founders to get a good understanding of the current trends in the landscape. A result of these interviews is seeing a pressing need for effective, yet targeted solutions.
"We have seen the quantum and complexity of fraud challenges faced by emerging market banks and fintechs, specifically in Africa, as they scale to provide increased financial inclusion. Orca is building a fraud prevention solution that is tailored for the African market," says Nivesh Pather, Norrsken22 in a statement seen by Bendada.com.
"The market needs a bespoke solution, rather than a retrofitted suite of tools that was built for global markets where the finance and regulatory infrastructure is different," he adds.
Orca's all-female founding team is a rarity in Africa and the world at large. Data from Africa: The Big Deal says that between 2019 and 2022, only 1% of funding into the continent's tech startups went to female-only-founded teams or solo female founders.
Thalia Pillay, CEO and co-founder of Orca, said, "We are excited about the strategic investors we have onboard, who can provide us with various types of support we are looking for at this early stage. We aimed to have a diverse cap table that reflects where and how we plan on growing the business. Most of our investors are builders themselves who have successfully navigated B2B and fraud spaces which makes them especially relevant to us".
