Casap Secures $25M Series A to Combat Fraud with AI Automation
In a significant boost for the financial technology sector, Casap, a burgeoning leader in intelligent automation for dispute and fraud operations, has successfully closed a $25 million Series A funding round. The investment, spearheaded by Emergence Capital with notable participation from Lightspeed Venture Partners, Primary Venture Partners, and SoFi, brings Casap’s total funding to $33.5 million. This substantial capital injection sets a new benchmark for venture investment within the payment disputes category, underscoring a pressing industry need for advanced solutions.
Financial institutions have long grappled with the cumbersome, slow, and expensive nature of traditional payment dispute resolution. These outdated workflows leave institutions vulnerable, particularly as fraud tactics continue to evolve at a rapid pace. A significant and growing challenge is first-party fraud, a deceptive practice where individuals intentionally misuse their own identity or account for financial gain. Unlike third-party fraud, which involves stolen identities, first-party fraud can be more challenging to detect as it often involves legitimate credentials and can be miscategorized as credit loss. This type of fraud, including instances like chargeback abuse where a customer falsely claims a legitimate purchase was fraudulent, now accounts for a staggering 30-50% of total fraud losses, representing a multi-billion dollar problem annually.
Casap is directly addressing this critical vulnerability with its AI-powered platform, designed to revolutionize how financial institutions manage payment disputes and mitigate first-party fraud. The company’s intelligent automation system covers the entire dispute lifecycle, from initial intake and evidence analysis to chargeback filing and customer communication. By leveraging artificial intelligence and machine learning, Casap’s platform intelligently analyzes evidence, predicts outcomes, and automates key actions, such as issuing credits and responding to merchants, significantly accelerating resolutions. A core component of its offering is a proprietary “first-party fraud score,” which proactively identifies suspicious activities and consumers, helping to prevent disputes before they escalate and reducing potential losses. This proactive approach not only cuts fraud losses—with some customers reporting over a 51% reduction—but also streamlines operations, enhances compliance, and improves the overall customer experience by providing quicker decisions and self-service options.
Investors recognize the immense potential of Casap’s innovative approach. Carlotta Siniscalco, Partner at Emergence Capital, highlighted that financial institutions are currently armed with outdated tools to combat the rise of first-party fraud. She emphasized that Casap transforms disputes, often an emotionally charged moment for consumers, into an opportunity to build trust. The company’s co-founder and CEO, Shanthi Shanmugam, underscored that Casap empowers financial institutions to achieve stronger consumer retention, fewer losses, and avoid regulatory missteps, thereby turning the dispute experience into a competitive advantage.
The newly secured capital will be instrumental in expanding Casap’s first-party fraud scoring capabilities and enhancing its AI-powered decision-making processes. The funding will also support strategic hiring initiatives as the company aims to eliminate friction across the entire payments lifecycle, further solidifying its position as a leader in intelligent automation for post-transaction risk. With its proven ability to deliver tangible results for credit unions, banks, and fintechs, Casap is poised to redefine how financial institutions tackle fraud and inefficiency, transforming them from everyday realities into rare exceptions.