Israeli start up Profitect, creator of fraud detection and loss prevention software, announced a second financing round of $5.5 million led by Genesis Partners and Cedar Fund. Cedar was the main backer in the company’s first round of $3 million back in 2005. Profitect plans to use the funds to expand its sales operation and recruit 15 positions, which would almost double the number of employees in the company.
The Profitect Suite offers automated pin-pointed guidance, for improved merchandise control, compliance assurance, loss prevention and fraud detection for large retail and FMCG (fast moving consumer goods) enterprises. The solution delivers bottom line benefits for the following cases:
- Unknown lost (shrinking sales/margins): including cashier fraud, label misplacement, stock management errors and after-sale service fraud (returns, invoices, etc).
- Known Losses (Waste and operational damages): excess ordering, excess supply, wrong management of expiration days, stock build-up, fraudulent waste registration, and more.
- Fraud: alerts on transactions matching pre-defined fraud patterns. Examples include: credit card fraud, employee discount frauds, refund fraud, merchandise delivery and receiving frauds, fraud in service departments, weighing fraud, expenses, working hours fraud, operational costs, service purchasing fraud, merchandise purchasing fraud, and more
- Paper Loss: pricing errors and manipulations, mark-down errors and manipulations, stock count erros and more
The Profitect product suite includes a set of integrated modules that spans across all operational areas of the client – the store and the supply chain (rather than just focusing on the Point Of Sale).
Profitect’s CEO David Even Haim, said in an interview:
“Losses discovered during inventory are a major problem. Instead of waiting for inventory results, our software can spot such losses early. Most large retailers include such losses when calculating their net profit, so preventing inventory losses greatly boosts profits.”
Profitect’s clients currently include the German retailer Metro AG as well as large Israeli retail chains such as the “Yellow” and “Menta” convenience store chains, as well as Blue Square Israel, Israel’s second largest supermarket chain.
Profitect was founded in 2005 by CEO David Even Haim and CTO Omer Matityahu, both former employees of Global ICTS, a dutch consulting company specializing in fraud detection and loss prevention. It is headquartered in Tel Aviv. Profitect’s Main competitors include Alpha Bay, Sequential Security and Adeptra.