Daniel Loftus at an LEO award ceremony. Image: Local Enterprise Office
As Barclays opens applications for its accelerator programme, Daniel Loftus discusses how valuable the scheme was to his business, UrbanFox.
With a background in software engineering and data science, Daniel Loftus co-founded UrbanFox – a start-up that began life as a customer analytics tool.
Today, UrbanFox is a completely different company. After some time in business, Loftus realised that the earliest iteration of the company could only go so far as there are a number of companies that already dominate the market when it comes to customer analytics tools.
When he realised it was time to rethink the start-up’s strategy, Loftus did some data science consultancy with banks and online merchants around customer behaviours. It was then that he became interested in fraud prevention.
Targeting fraud
“We help large payment processors and companies that facilitate the transfer of money from a merchant site to a card or a bank,” Loftus told Siliconrepublic.com.
“We help these banks and merchants prevent a very specific type of fraud that occurs on their network, known as synthetic fraud.
“Essentially, what UrbanFox is able to do is simulate what it thinks the behaviours of these fraudsters are and then it compares them to what’s happening in real time, allowing us to detect fraudsters before they actually commit a crime, so to speak. The type of fraud we’re targeting isn’t a particularly well known type of fraud, but it’s highly valuable.”
‘The quality of companies coming out of Ireland is phenomenal, across fintech, in areas like regtech and legaltech’
– DANIEL LOFTFUS
According to Loftus, the average synthetic fraud transaction is worth about $14,000. What criminals typically do is buy a number of iPhones in a single transaction, or other expensive goods such as airline tickets. Then, they resell these products to other criminals for cash.
“To be perfectly honest, it’s a brilliantly efficient way to launder money. They’ve just turned it into factory processes.
“In order to build the tech, we have to understand how this type of fraud works. We maintain a fairly accurate understanding of who these people are, where they are, the networks they move in. All that type of stuff.”
Barclays Accelerator
UrbanFox took part in the Barclays Accelerator, run in collaboration with Techstars, which provides emerging fintech businesses with an opportunity for experience and support during a 13-week programme in London.
“It’s being in a room with people who all know a little bit about finance and fintech, where you can turn and ask them about anything. If you don’t know about, say, PSD2 or compliance, someone else in the room will,” Loftus said.
“There’s never a case of, ‘Oh, I’ll put you in touch with so-and-so’, and you never hear anything back. With Barclays, you heard back a couple of hours later and you’d be exchanging LinkedIn profiles or emails. That is really what has made our company.”
Loftus said the accelerator helped him gain immensely valuable contacts. While accessing potential clients can be very difficult for a start-up, it has been much easier for UrbanFox since heading to London for the accelerator.
For those who hope to participate in the programme, whether it’s next year or further down the line, Loftus advised them: “Be there. Be in the Rise building from 8am to 6pm. There is that huge opportunity for chance encounters. Any of the directors from Barclays could have an investor in for a coffee, and then all of a sudden there’s a conversation happening involving you.
“You will probably never get the opportunity again to be in a room with so many people who are so interconnected and well-connected, so have that level of open-mindedness. Have that idea, but also be willing to accept changes to that idea.”
Fintech in Ireland
When we spoke to Loftus, we asked him about his thoughts on Huckletree’s new fintech hub in Dublin 4, which is set to open later this year, and the start-up scene in Ireland.
“I’m personally quite excited about it. Ireland has this great fintech community, but there has been nowhere to put it. We’re all scattered all over the place,” he said.
“When I participated in the Techstars and Barclays Accelerator, it seemed that they put all of their fintech companies in one building. The amount of knowledge available … If there was anything I didn’t know, I could ask my desk-mate and figure something out much more quickly. That can only be a good thing.
“The quality of companies coming out of Ireland is phenomenal, across fintech, in areas like regtech and legaltech. To be fair, it’s really, really exciting. That’s my nerdy opinion of the whole thing!”
UrbanFox is currently in the process of raising its next round of funding, and Loftus has his eye on future expansion.
“My goal has always been to build in Ireland and have our development team here, and then sell in the US and the UK,” he said.
Looking beyond this round of investment, the start-up has a pipeline of how it plans to evolve in the coming years, with a focus on keeping the US as its main market. There are a couple of milestones to go before it achieves Loftus’s biggest long-term goals, but the company appears to be well on the way.
