Fraudscope, a healthcare fraud detection platform built by two Georgia Tech cybersecurity Ph.D’s, has raised a $1.5 million seed round to focus on product development and build out their team. Based at TechSquare Labs in Midtown, the Atlanta Startup Battle winners connected with Silicon Valley-based fund Spider Capital after pitching at the event. Additional investors, GRA Venture Fund, TechSquare Labs, Mosley Ventures, and others are all Atlanta-based.
According to Fraudscope co-founder and CEO Dr. Musheer Ahmed, fraud eats up about $270 billion of the total U.S. healthcare market, the largest healthcare market in the world. No current data analytics platform is sophisticated enough to catch fraud as it constantly evolves. Fraudscope’s founders’ cybersecurity background — other co-founder Dr. Mustaque Ahamad is also the co-founder of phone fraud security company Pindrop Security — has helped them develop a product that uses machine learning to evolve along with the fraudsters.
“People have tried to tackle the problem of fraud but they’re not able to keep up with it,” says Dr. Ahmed. “What’s unique about Fraudscope is that as fraud continues to evolve, we can immediately identify it before they’re paid out and stop those payments or take corrective action right away.”
The company is currently in the first stages of pilot programs with several large insurance payers, who may become their eventual clients.
“Last year we uncovered a billion dollar fraud scheme that had been going on for ten years that nobody had caught. We ran it through our technology and immediately caught it,” says Dr. Ahmed. “We’re really excited to catch all those things that people are missing and immediately make an impact in the space.”
Dr. Ahmed said they have laid out their product roadmap for several years and will now build out the team of 9 to accelerate development and begin signing up clients.
“We are proud to see research discovered in Georgia is poised to solve a significant need in the healthcare industry,” Michelle Jarrard, Managing Director of the GRA Venture Fund adds. “This financing round is a terrific example of how investors, local and non-local, are working in collaboration to support Atlanta’s aspiring entrepreneurs.”
Dr. Ahmed said that, down the line, the technology could evolve to address additional entities in the healthcare space.
“Fraudscope aims to put that wasted money back into real patient care and make sure healthcare costs are sustainable for all Americans,” says Dr. Ahmed.