New York-based Fakespot, a data analytics platform that spots fake online product reviews, has received $1 million (Rs 7 crore) in seed funding from SRI Capital.
SRI Capital said in a statement its investment was part of a larger $1.3 million round that the company raised. It did not identity the other investors.
Fakespot will use the funds for product development and to launch new fake review detection services.
“The trillion dollar e-commerce economy is based on consumer reviews and many of those are fake…,” said Sashi Reddi, partner at SRI Capital, explaining the rationale for backing Fakespot.
Founded in 2016 by Saoud Khalifah, Fakespot uses patented algorithms to sift out online product reviews it thinks are unreliable on e-commerce platforms.
The two-year-old startup uses several parameters that include verified purchase, writing style, grammar and spelling correlation, purchasing patterns and content correlation to spot fake reviews, according to information available on its website.
“Our mission and primary goal is to make all online information trustworthy using technologies such as artificial intelligence and advanced data analytics,” Khalifah said.
“Fakespot was founded because I noticed that there has been an ever-increasing volume of inauthentic information published on the Internet. If left unchecked, user's decisions can be swayed by false information.”
Till date, Fakespot has analysed and graded more than 2 billion reviews on platforms that include Amazon, TripAdvisor, Yelp and the Apple App Store.
A masters in software engineering, Khalifah had previously worked at companies that include Goldman Sachs and Lockheed Martin.
For SRI Capital, which was founded by Sashi Reddi, this marks its fifth bet from its recently launched fund with a target corpus of $100 million. The SRI Capital Fund-I is registered in the US and typically invests $1-3 million in a startup at the pre-Series A level.
The fund marked the first close at $40 million (Rs 274 crore then) in July and aims to hit the final close by March next year. It expects to raise bulk of the capital from Limited Partners in the US, though it also expects to get a contribution from investors in Europe and Singapore.
The fund’s previous investments include LetsMD, a fintech startup catering to the healthcare sector; Sports Flashes, which operates a sports content app; and IndianMoney, a financial education company.