In Conversation with Nuno Sebastião, CEO of Feedzai

May 4, 2016

Tricia Kemp - OAK HC/FT

Patricia Kemp: What are the biggest issues shaping the fraud prevention industry?

Nuno Sebastiao: Commerce is undergoing a tremendous shift — from physical to digital. Today, $30 trillion is moved through electronic payment, and nearly $16 billion of that is lost to fraud. That’s a huge problem — not only that volume of fraud, but the value of business being lost because of concerns over fraud or payment security.

First, the nature of fraud itself is changing. Traditionally, we defined fraud as petty crimes. Employees skimming money from the books. Today, financial fraud is far more sophisticated and organized, and individuals or large-scale organizations are able to steal entire databases, credit details or all kinds of sensitive information. Criminals are professional, well-organized and now going after far more than just petty cash.

Second, we need to ensure that anti-fraud tools and solutions evolve alongside the rapid pace of change within commerce. Even though transactions are quickly migrating from the slow, physical world to ecommerce — from brick-and-mortar stores to online exchanges — many of the fraud protection solutions we see today are based on old methodologies and technologies. This is where we see the greatest opportunity to make use of huge volumes of data across all dimensions of the marketplace. We live in a world of omnidata and need to correlate all these data points to make commerce safer.

PK: What is Feedzai? What problems are you solving?

NS: Feedzai makes sense of commerce omnidata at scale, in real time using artificial intelligence and machine learning. In the past, protecting commerce relied on people — dozens or even thousands, in a business like Amazon or Citibank — reviewing orders manually. Feedzai is automating this critical process by aggregating and correlating omnidata and then providing a finer level of analysis and granularity not previously seen. Our technology identifies trends and patterns and then predicts — in real time, as you swipe your credit card — whether a transaction is good or bad, and if it matches the profile of the customer or the merchant. In some cases, all of that processing can be achieved within 2 milliseconds which is truly remarkable. We can then advise merchants or acquirers or issuers whether or not to process a payment.

Our solutions don’t replace a company’s existing platforms or vendors. Rather, we augment and enhance them by congregating the disparate data into a single, integrated platform. That’s far more powerful. For some clients that includes up to 30 separate data sources being correlated and analyzed at remarkable speed — 200 milliseconds or better.

All of these solutions require technological and domain expertise, which is why our team is comprised of former engineers from PayPal, Visa, Amazon, CyberSource and other companies that have been working on these issues for a number of years.

PK: How does technology play a role in your company?

NS: At our heart we are a technology company, which is a key reason we chose to work with Oak HC/FT who complement our engineers with valuable domain sales and marketing expertise. Until a year ago everyone in our organization was an engineer by training — even the sales team — and today we are more than 100 people, including with broader expertise in business, management and marketing but all have a very quantitative bent. Engineering is and always will be at our core, however.

PK: What is your view on the Apple vs. FBI debate surrounding the iPhone?

NS: I am a strong believer in privacy and wouldn’t want my personal information becoming available to third parties. This is a complex issue, but I side with Apple’s position against creating a backdoor into iPhones. If you do it once, and legally, where do you draw the line and stop in the future? That is why I think Apple is right on this point because it is so easy to decline from that point.

PK: What are three key moments that led you to where you are today, as CEO of Feedzai?

NS: The first key moment was establishing the business, when Paulo Marques, Feedzai’s chief technology officer, Pedro Bizarro, our chief science officer, and I came together. I knew then, regardless of what we were going to do, together we would make it happen.

The second key moment was when we attracted our first investors and received initial funding from Sapphire Ventures. That made us believe the business was possible.

The third key moment is still ongoing, which is proving and demonstrating that we weren’t just lucky and instead are building a sustainable business. That really began last year as we expanded our team and attract new talent and clients. We recently surpassed the $1 billion in total processed daily volume milestone and are well on our way to double that level.

PK: Where do you hope to be, as an executive, in 5 years? What are your aspirations for the company in 5 years?

NS: I’m way passed what I thought possible 10 years ago, but I always want more. I want to prove that we can build a large, self-sustaining business. Currently we are a market innovator. But I want Feedzai to be a market leader — in payments as well as complementary markets and industries. Achieving this goal requires continued focus on executing, strengthening the team and scaling up the business.


If I weren’t a CEO I would be… A builder. I love woodworking and assembling electronics.

My favorite movie is… Among the classics, it’s Citizen Kane. My favorite recent film is The Martian, due to my background in aerospace engineering. I’d love to volunteer for a Mars visit myself.

My favorite musician is… David Bowie.

My favorite hobby is… Electronics. I build audio amplifiers and stereo equipment in my spare time.

My favorite food is… Portuguese bacalhau, of course.

Do you have any pets? I have a dog and three cats back home in Portugal being looked after by my mother.