TLDR: AI startup Casap has successfully raised $25 million in Series A funding, led by Emergence Capital, to combat the growing issue of first-party fraud. This investment brings their total funding to $33.5 million, marking a new record in the payment disputes sector. Casap’s platform leverages artificial intelligence to automate dispute resolution, identify fraudulent activities, and streamline operations for financial institutions.
New York-based AI startup Casap has announced the successful closure of a $25 million Series A funding round, spearheaded by Emergence Capital. This significant investment, which also saw participation from Lightspeed Venture Partners, Primary Venture Partners, and SoFi, elevates Casap’s total funding to $33.5 million, setting a new benchmark for venture capital raised in the payment disputes category. The funding aims to bolster Casap’s AI decision-making capabilities, expand its workforce, and broaden the application of its technology across the entire payments lifecycle.
Casap, co-founded by Shanthi Shanmugam and Saisi Kadhirvel, is at the forefront of tackling first-party fraud, a pervasive issue where customers intentionally dispute legitimate transactions. This type of fraud currently accounts for a substantial 30% to 50% of total fraud losses, highlighting a critical need for modern solutions in the financial sector. Traditional dispute resolution processes are often described as outdated, slow, and costly, relying on fragmented tools and manual reviews.
Casap’s innovative platform directly addresses these challenges by deploying advanced AI agents to manage the entire dispute lifecycle, from initial intake to chargeback filing and customer communication. These AI agents are designed to analyze evidence, predict outcomes, and automate key actions such as issuing credits, filing chargebacks, and responding to merchants. Furthermore, the system generates a ‘fraud score’ to help financial institutions proactively identify suspicious consumers and merchants.
Carlotta Siniscalco, a Partner at Emergence Capital, emphasized the urgency of the problem and Casap’s unique approach, stating, ‘First-party fraud is on the rise, and financial institutions are armed with outdated tools. Casap turns disputes — one of the most emotionally charged moments in finance — into an opportunity to earn trust, the only currency that matters.’
The efficacy of Casap’s solution has been demonstrated through tangible results; two of their clients reported an impressive reduction of over 51% in fraud losses. Moreover, these institutions were able to process a higher volume of cases without the need for additional staffing, underscoring the operational efficiencies gained. Shanthi Shanmugam, Co-founder and CEO of Casap, noted the increasing pressure on financial institutions: ‘Financial institutions are under pressure to do more with less: stronger consumer retention, fewer losses, and no regulatory missteps.’
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With this new capital, Casap plans to further refine its AI-driven fraud scoring and decisioning capabilities, enabling financial institutions to detect fraudulent activities earlier and streamline every aspect of the dispute process. The company is also actively recruiting across various key roles to meet growing customer demand and advance its broader vision of reducing friction throughout the post-transaction lifecycle. The Series A round values Casap at $105 million, reflecting strong investor confidence in its technology and market potential.
