Some nice momentum for Barcelona based Red Points which has closed a $12M Series B, led by Northzone. Previous investors Mangrove and Sabadell Venture Capital also participated in the round.
This follows a $2.2M Series A in September 2016 when customers numbered in the region of 75. It’s now reporting customer numbers have passed 300, up from 100 last year. While its revenue growth rate for 2017 was 350 per cent.
The startup offers a cloud-based SaaS solution for IP infringement detection and removal. The system scans for counterfeit products online on behalf of customers and automates the process of having any fake goods (and/or pirated content) removed.
CEO Laura Urquizu says it’s currently removing more than 200,000 incidents of illegal products and content every month for brands and media companies on marketplaces, social apps and websites — touting an “efficiency rate of 96 per cent” (which she says means that for everything it detects it reaches an average removal rate of 96 per cent).
The new funding will be going towards stoking this growth momentum — with a New York office opening planned for February 2018. Urquizu says the US market already accounts for around a third of its customer base, following the opening of sales there last March.
“We’re now 75 professionals working together. In 2018, we plan to bring 65 new professionals to our company. Our focus is on hiring sales professionals from the US and expanding our technology team, with the objective of increasing Red Points’ deep-learning and image recognition capabilities,” she tells TechCrunch.
While anti-piracy technology still constitutes a chunk of Red Points business, anti-counterfeiting and brand protection makes up the large majority (75 per cent) of its current revenue, according to Urquizu.
“The reason for this shift towards brand protection is because counterfeiting is a problem that has spread like a virus in the social media and ecommerce era,” she explains. “It affects all kinds of businesses of all sizes, and we offer the smart technological solution to this issue.”
Red Points says it’s using deep-learning technology within all the features of its platform — which was refreshed with a new UX and expanded features last September.
In terms of specific techniques, it says it uses “advanced” keyword monitoring and image recognition to identify clients IP assets online — with a promise that it will find all such assets, and be easily able to distinguish between legitimate and infringing cases.
It also applies its learning tech to derive insights from clients’ enforcement history — suggesting new detection rules and validation opportunities, which it claims decreases the amount of time of analysts need to spend identifying infringements.
In some instances it can also automate removals for speeding up enforcement procedures around brand protection, and touts a 4.5 hour average from detection of infringing content to takedown.
Another strand of the proposition feeds back asset-based analytics to customers — offering “actionable intelligence data on assets, type of infringements, regions, sellers etc, so it can be used to benefit the business”.
As regards the current customer base, Urquizu says: “We’re performing especially well in verticals like Toys, Fashion and accessories, Sports, as well as Design and Furniture” — though she notes the software itself can handle “all kinds of verticals”.
In terms of competition, she argues that Red Points’ market positioning is “unique” — and says that’s what’s excited investors. “This… is one of the reasons why we’ve closed this investment round,” she adds. “There are some service-led providers that use some technology to address IP infringements, but no one uses a tech-ed solution like we do.”
Commenting on the funding in a statement, Northzone partner, Jessica Schultz, said: “There is a clear gap in the market for a technology solution that is scalable and flexible to the demands of the brand owners, and has strong relationships with the online properties where IP infringements are a problem.
“When we met the Red Points team, we were impressed with what Laura and her team had built. Thanks to their SaaS model and a product that is highly effective and at the leading edge of innovation, we believe they have a real competitive advantage compared to service-led offerings.”