Ukrainian startup Scalarr has attracted $7.5 million to expand to the Asian market, cofounder Inna Ushakova wrote on Facebook on Feb. 11.
The company, which develops software to protect advertisers from online scammers, has raised money from the European Bank of Reconstruction and Development and three investment funds, TMT Investments, OTB Ventures and Speedinvest.
Scalarr’s software helps mobile application developers to detect fake ads created to siphon off their money. To fight online fraud, the company uses artificial intelligence.
Globally, ad fraud is a growing problem because scammers are coming up with new ways to make money on fake ads. For example, they can hide online ads under others. Users only see the ad at the top, but when they click, they click on two or more. Advertisers have to pay the fraudsters for each additional click that has no human behind it. Fraudsters also can use bots to generate fake clicks.
The startup has worked with big names like international online retailer Joom, Russia’s largest tech firm Yandex and game developer Goodgame Studios. According to Ushakova, the startup saved its clients nearly $22 million in 2020 by detecting fraudulent ads before the advertiser paid for the clicks.
Ushakova said Scalarr’s rivals use a less effective approach — they try to detect fraud by looking for a list of suspicious activities. Although such lists are constantly updating, it’s hard to keep up with the fraudsters, according to Ushakova. She said only machine learning could keep track of always changing tricks and help accurately detect fake ads.
According to Ushakova, fraud is evolving all the time. “It’s like a Tom and Jerry game. They are ahead of you and we are trying to catch them,” she said.
Investors seem to be happy to work with the Ukrainian startup. “Inna (Ushakova) is a great founder. I admire how passionate she is about the company and its existing and upcoming products,” Alexander Pak, investment director at TMT Investments, told the Kyiv Post. Pak said that Scalarr’s tech is important because it saves money for advertisers and app developers.
Ushakova founded Scalarr with her partner Yuriy Yashunin in 2016. Before that, they directed mobile marketing agency Zenna where they first realized how dangerous fraudulent ads could be. Zenna’s team couldn’t find a satisfactory service to fight ad fraud so they decided to build their own tech. Now the company employs 35 people and has offices in Kyiv, Kharkiv, San-Francisco and Wilmington.
