Red Points Closes $38M Round for Its ‘Antivirus’ SaaS


3rd April 2019 – Barcelona-based Red Points has closed a $38 million Series C led by Summit Partners. Existing investors Northzone, Mangrove, Eight Roads Ventures and Banco Sabadell also participated in the funding round which follows a $12M Series B last year.

The company’s software as a service platform targets brands wanting to protect products and their reseller network from cheap online fakes and/or piracy, with both physical branded goods and copyrighted digital content covered by Red Points’  brand protection tech.

It automates the detection and sending of infringement notifications using marketplace scanning and machine learning powered image recognition that’s capable of spotting potential fakes at scale, combined with customizable rules that let brands prioritize and automate enforcement actions.

“The whole process is automated from detection to enforcement,” CEO Laura Urquizu tells us. “To the companies that we help we usually say that we are like an antivirus. Because we are there the counterfeiters move to other brands, other companies, other places. So in order to keep it clean it’s very important to counter with an act — or with a technology like ours — in order to have, let’s say, the Internet and the marketplaces and the social networks as clean as possible.”

Commenting in a supporting statement, Steffan Peyer, principal at Summit Partners, added: “Brands around the world are facing an unprecedented rise in online IP infringement. Red Points is a category-leader, offering an intelligent and robust technology platform that is purpose-built to address this growing pain point. With differentiated technology and a strong leadership team, we believe that Red Points is well positioned to accelerate its growth and further solidify its leadership in the Brand Intelligence market.”

Detecting and acting on online sales of fake goods still makes up the lion’s share of Red Points’  business, accounting for around 70% vs 30% dealing with digital copyright infringements. “We started with digital content and then we really made a very interesting decision to put our efforts a lot in brand protection and fake products. This is where the platform that we developed is very strong,” says Urquizu.

She notes for example that the software helps brands track sellers to highlight adjacent issues related to illegal sales, such as underpricing in specific geographies.

Analytics around IP threats is another core element of the SaaS proposition. “Another very important functionality is all the data that we are able to bring to our clients. Their own data and data that we produce related to the vertical, related to other clients etc.

“Customers use this IP ‘threat intelligence’ for various use-case — such as to see where most of the counterfeiting is happening and on which platforms fakes are being distributed. That way they can also implement their own strategies related to those specific platforms or to those specific countries. They also understand who are the top sellers infringing — so they can also take legal action against them.”

“Counterfeiting is everywhere, everywhere,” adds Urquizu, discussing the scale of the online fakes problem for brands. “All platforms, all social networks are affected. And of course when something is trendy it is affected. We see it in the brands that are offering new gadgets that are very trendy. Immediately they get the problem of counterfeiting and with platforms and social networks the more trendy the better it’s a place for counterfeiting to use it as a playground.”

Red Points is now detecting more than 500,000 incidents of illegal products and/or content per month for 550+ customers. That’s up from 300+ customers when we spoke to Red Points last year.

Read the full article in TechCrunch here.