The following interview is a conversation we had with Matteo Bogana, CEO & Co–Founder of Cleafy, on our podcast Category Visionaries. You can view the full episode here: $12 Million Raised to Build the Future of Online Fraud Prevention
Matteo Bogana
It’s going great. Thank you.
Brett
Thank you for being here. Let’s go ahead and just kick off with a quick summary of who you are and a bit more about your background.
Matteo Bogana
Yeah, for sure. I am the CEO and co-founder of Cleafy and I’m coming with a very technological and scientific background. I have a master and a PhD actually in computer science center at computational physics. They spent my life in solving complex scientific and technological things. So I worked beginning at university, then I stayed in accenture and general electric. Eventually I get back to the university and then I incorporated glitchy in 2014.
Brett
What was that? Aha. In 2014 that made you say, yep, that’s it, I want to go build a company.
Matteo Bogana
Yeah, but difference. What brought us to the point of deciding that we had something in our hand has been in the moment in which everybody was telling us, you are trying to fix a problem that is not actually technological complex, but scientifically impossible to do. There have been ten years of research in this topic between universities and corporations, and so you will not do it. And we did it. We have been able to check in real time if a content was tempered on a web page, not having any kind of information on the context. And starting from this very point, we decided that we had something that was going to have a great impact both in application security and fraud management at scale. So we started.
Brett
What were those early days like?
Matteo Bogana
The early days were very funny, actually. So it was like living in a movie. There were just the four of us as a founders and later on people started arriving, but they were very tough because at the very beginning the market was not actually there. We arrived quite early for the kind of technology that were developing. So we struggled actually for a couple of years in order that acquire the first customer and we had to create a context and the set of condition in order to put gliffy in the position to be able to be evaluated as a very effective solution in the space of road management. Actually, there were three technological guys at the beginning and there was me doing everything else that was not writing code and moving on.
Matteo Bogana
Later on we start growing and we arrived having a little bit more structure, but most really tough at the beginning.
Brett
What was the most difficult thing you experienced in those early days?
Matteo Bogana
The most complex things at the early days actually has been for sure to get traction on the customers. We are mixing together actually cybersecurity and the fraud in the same context and in the same solution. So people were not actually very willing to discuss and to open up their problems when were presenting because were not IBM, were not a consolidated company. So we spend really a lot of time in meetings and creating consensus and the trust with the first prospect customers before being able to start win the proper traction and the proper tasks in order to go to the market and have success.
Brett
What’s the customer base look like today? Can you just paint a picture for us of kind of the average client or the average customer or maybe that ICP that you’re targeting?
Matteo Bogana
Yes, for sure. We are targeting mid large banks and financial institutions. We actually today are targeting all those institutions that have a structured environment in which they are managing fraud with a dedicated fraud team and we are addressing directly or the fraud manager or the CISO of the company. So we are scoping Fortune 500 customers for sure. And on top of that also all the startups and fintechs that are in an advanced growth phase.
Brett
How does the messaging differ when you’re targeting the startups and the fintechs compared to like the Fortune 500?
Matteo Bogana
There is a huge difference in the messaging startups and particular. I would talk about fintechs that are a particular kind of startups. According to our experience, they already have in place a mindset in which there are no silos and no barriers. There is no difference between cybersecurity, application security, fraud management and integrated financial risk. So they immediately understand the power of having a single platform that is managing all the space going from the cyber rasp down to the more financial and fraud transactional risk altogether.
Matteo Bogana
This is completely different when you address a large bank or corporation in which there is usually a big separation between the fraud team and the cyber team, and there is a standard way of working in which usually the fraud team is more oriented on user behavior and transactional contents and information, while the application security is in the space of those guys that are managing the cyber and the web application firewalling and all the kind of backbone infrastructure, security systems.
Brett
How would you describe your marketing philosophy and your marketing approach?
Matteo Bogana
Well, we learned really a lot on the approach that we must use in this kind of solutions. First of all, we never go to the customer asking if they have a specific problem to solve, because we understand that there is a lot of friction in customer in opening up, which are their complexities in the space of fraud or cybersecurity. So we prefer to have a market in which we create trust, describe into the market what we are able to see, to identify and to manage in a very neutral way. The most effective way that we have identified the lung disease to produce an effective marketing pipe is what we call Cleafy Labs.
Matteo Bogana
Cleafy Labs is a team of threat intelligence guys that are leveraging all the kind of information that our platform is able to bring up in our customer set and in the wide Internet. And so we produce periodically reports on new threats that we identify. And the kind of visibility that we bring is such that these guys today are presenting closed door, not only in public events, but also to NATO events or to Interpol events, FBI events. So we are creating trust, communicating directly to our economic buyers in closed door meetings in which usually there is more open discussion on what is going on and what might be fixed.
Brett
What about the competitive landscape? What does that look like today?
Matteo Bogana
The competitive landscape actually is mainly concentrated in a few players. I would say that almost all of them are israelian or former israeli. And companies that have grown, some have been acquired by a company, some not. But I would say that almost all the players are highly focused today in more behavioral and transactional areas of the fraudhouse. So they keep on looking at patterns of frauds, and also their sell cycle is based on fraud patterns. They are not looking for a very generic overview and a deep visibility on what is happening to the application, to the user, to the transaction, in order to be able to reconstruct an attack while it is evolving. So competition today might come, for example, from companies like Biocatch or Fitzihe or IBM trustee LexisNexis. But this is not a direct competition.
Matteo Bogana
It’s a competition on the same budget, on the customer side. That actually problem that we are solving are not in full overlap with them.
Brett
This show is brought to you by Front Lines Media podcast production studio that helps b two b founders launch, manage and grow their own podcast. Now, if you’re a founder, you may be thinking, I don’t have time to host a podcast. I’ve got a company to build. Well, that’s exactly what we built our service to do. You show up and host and we handle literally everything else. To set up a call to discuss launching your own podcast, visit Front Lines IO podcast. Now back today’s episode. What about your market category? So when I introduced you, I said you’re an online fraud and prevention platform. Is that how you think about your market category or what market category are you playing in?
Matteo Bogana
Thank you for the question. This is a very good question, actually. We spelled the ten years of our life on which category we should be in. And we did this also with very important market analysts. They are mapped in the category of fraud management solution. Actually, we are covering two areas. One area is for sure the fraud management solution. The other one is more a cyber area in which we cover part of the web application firewalling and part of an object that actually does not exist out of the space of internal security, the XDR, that is the extended detection and response product. The principle is that we act at zero trust, collecting any kind of information and operating as everything can be a risk and ongoing attack that might bring to a fraud.
Matteo Bogana
This is a unique way of working and is a way of working that usually mixes cyber aspects like complex web application firewalling or XDR, and more fraud oriented aspects like fraud management or behavioral analysis. For fraud management aspects, bringing together everything with a dynamic context and dynamic information that we have, we are able to bring to our customers an extremely deep visibility on what is happening. And we put in place the capability for a system that is based on AI to automatically interpret what is going on, explain through generative AI to our customers what is happening, and put in place automatic responses to attacks before they are able to become slow. It’s a very technical area. So probably what I’ve said is very technical.
Matteo Bogana
At the end of the day, we are a different category compared to any other kind of solution that is right now out there in the market. We learned that being a completely new category is not simple. So we are starting mapping ourselves in a couple of areas and we are working on why we are growing in order to create a new category today.
Brett
What’s been the most important go to market decision that you’ve made?
Matteo Bogana
The most important GTM decision that I made has been not to start in the United States. So everybody that is doing enterprise business is starting in us. The decision that we took at the beginning is to keep focus in Europe and to avoid to increase the consultancy footprint, keeping a very sharp focus on the product and automation and having everything in place in order to have the system doing things, avoiding to have people entering into the loop from our side to manage by hand the decisions or events, the decision not to start the US has been a very good decision in the long shot. At the beginning, it was something that was actually not really appreciated by everyone because they keep on saying us is the starting market for this kind of solutions and everything else.
Matteo Bogana
The truth is that for the kind of decisions that European Central bank and the financial institutions have taken in Europe, in the European Union during the past years, frauds and attacks in this specific area have been more complex and more advanced in Europe than in the United States. So today, the wave that has been introduced in Europe following compliance on instant payment and PST two to our compliance related to open banking are coming to us and we are in a very good competitive position compared to other solutions that are in place and new startups that right now are starting growing up in the US.
Brett
As I mentioned there in the intro, you’ve raised 12 million to date. What have you learned about fundraising throughout this journey?
Matteo Bogana
What we have learned is that fundraising is an extremely consuming activity one side, and in order to raise money, you must be at the right time on the market. Maturity. If I probably not everybody knows, but we organically for many years. At the beginning, after a very small seed investment, and at the very beginning, the market was not there yet. If I would have collected plenty of investments at the very beginning, probably I would have failed, because the capability of the company to have market and very aggressive and the hypergrowth space at the beginning was not there. Having the possibility to wait, to keep on growing and to be patient and collecting money when the market arrived has been probably a very good point of freedom that makes the difference.
Matteo Bogana
Obviously, now that the market is here and things are rising and we are on track for success, we are in the position in order to accelerate our collecting money and our international growth.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture vision here?
Matteo Bogana
What is happening into the future is the fact that more and more AI based attacks will rise. There is a huge expectation from the market that advanced AI will be able to do everything automatically in the fraud management space. We do not see things in this way. We think that it is very important for customers to have a very deep technology in place that covers also AI, because obviously the kind of attacks that we will see in the upcoming years coming from virtual humans doing things that today are not scalable because they require somebody physical doing that is going to explode. But at the same time, you cannot imagine that there’s going to be an automatic system capable to all the job on its own.
Matteo Bogana
What we are investing in and we see as the future is a machine and AI that is able to reduce dramatically the workload for the fraud management team will be able to remove all those boring and repetitive activities they must do every day in order to manage standard noise in the background. But at the same time, AI will be a very good way in order to support the analyst in collecting quickly all the required information in order to have a clear view of what is going on or to trigger a more complex and interdisciplinary analysis on the attacks that they will be facing. So the future is for sure in AI on the side of attackers is with AI on the side of the defenders.
Matteo Bogana
But more and more in the future, the quality of the analysts that are going to investigate the most complex attacks and the most dangerous attacks will be mandatory. And it will be very important for companies, for enterprises to have this kind of resources on board.
Brett
Amazing. I love it. We are up on time, so we’re going to have to wrap here before we do, if there’s any founders that are listening in, they feel inspired. They want to follow along with your journey. Where should they go?
Matteo Bogana
For sure, there is our website for more. Let me say interesting topics related to fraud and attacks. There are Cleafy Labs, there is a blog on our website and we keep on informing all people through LinkedIn so they can follow us on LinkedIn for sure.
Brett
Amazing. Well, thank you so much for taking the time, especially on an off day for you. I really appreciate it and especially so late at night there in Italy. Really appreciate it. This has been a lot of fun. I’ve learned a lot from you and I know the audience is going to as well.
Matteo Bogana
Thank you very much, Brett. Have a great day.
Brett
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