Scammers have become psychological warfare experts, manipulating victims with deepfakes and AI-powered deception that results in a staggering $1.03T in global losses annually. As traditional security systems struggle to keep pace with this evolution from technical hacking to human manipulation, financial institutions face mounting pressure to prevent authorized push payment fraud before it happens. Charm Security tackles this trillion-dollar problem by focusing on what other solutions miss – the human vulnerability factor. The company reverse-engineers scams, identifies psychological patterns, and deploys real-time AI interventions to “break the scam spell” at the moment of deception. Unlike traditional fraud detection tools that identify issues after money transfers, Charm analyzes human vulnerabilities, builds psychological profiles, and delivers personalized protection strategies that disrupt scams before financial harm occurs.
AlleyWatch sat down with Charm Security Cofounder and CEO Roy Zur to learn more about the business, its strategic approach to preventing social engineering attacks, and future plans.
Who were your investors and how much did you raise?
Charm Security raised $8M in seed funding, led by Team8’s Venture Creation Fund.
Tell us about the product or service that Charm Security offers.
Charm Security is an AI-powered customer security platform that prevents scams, social engineering, and human-centric fraud. It leverages real-time AI-driven interventions, psychological insights, and scam intelligence to help financial institutions and digital platforms protect their organization customers from deception and manipulation by scammers and fraudsters.
What inspired the start of Charm Security?
Financial fraud has evolved from technical system exploits to AI-driven social engineering, making individuals the weakest link in security. With $1.03T lost globally to scams, Charm Security was founded to intervene before fraud occurs by analyzing human vulnerabilities, psychological patterns, and scam exposure.
How is Charm Security different?
Unlike traditional fraud detection tools that identify fraud after the fact, Charm Security:
- Reverse engineers scams to identify Human Vulnerabilities, Exposures, and Exploits (HVE).
- Builds psychological profiles and analyses scam susceptibility.
- Uses AI-driven, real-time interventions to disrupt scams before money is transferred.
- Engages customers proactively through security scores, personalized insights, and tailored fraud prevention strategies
What market does Charm Security target and how big is it?
Charm targets financial institutions, banks, and digital platforms, focusing on mitigating fraud for both businesses and consumers. The market is vast, with scam-related losses exceeded $1.03T globally in 2023, highlighting the urgency and demand for real-time scam prevention solutions
What’s your business model?
Charm Security operates primarily as a B2B and B2B2C business. We provide financial institutions, fintechs, and digital platforms with an AI-powered Customer Security Agent designed to protect both organizations and their end customers from scams and social engineering. Our platform helps our partners proactively reduce scam-related losses, enhance customer trust, and comply with evolving regulatory expectations.
How are you preparing for a potential economic slowdown?
Unfortunately, economic downturns typically lead to increased fraud and scam activity, as financial stress makes individuals more vulnerable and fraudsters more active. This dynamic creates a tailwind for Charm Security, as our solutions directly address the surge in scams and social engineering attacks, positioning us to help organizations better protect themselves and their customers precisely when these protections become most crucial.
What was the funding process like?
Charm Security was built in partnership with Team8’s venture creation model, which involves identifying significant market challenges, forming expert teams, and creating solutions tailored for enterprise adoption.
What are the biggest challenges that you faced while raising capital?
We didn’t encounter significant funding challenges because Charm Security was established through a structured venture-creation process with Team8. This partnership created strong alignment between us, the entrepreneurs, and our investors from the outset. Together, we went through extensive exploration, ideation, and validation phases to ensure we’re solving a meaningful and sizable market challenge. This process streamlined fundraising and reduced many of the traditional hurdles startups face when seeking capital.
We didn’t encounter significant funding challenges because Charm Security was established through a structured venture-creation process with Team8. This partnership created strong alignment between us, the entrepreneurs, and our investors from the outset. Together, we went through extensive exploration, ideation, and validation phases to ensure we’re solving a meaningful and sizable market challenge. This process streamlined fundraising and reduced many of the traditional hurdles startups face when seeking capital.
What factors about your business led your investors to write the check?
- The urgent need for scam prevention as fraud tactics evolve beyond traditional fraud detection methods.
- AI-driven, real-time interventions offer a new approach to stopping fraud before it happens.
- The expertise of our founding team added credibility.
- Team8’s proven venture creation model.
What are the milestones you plan to achieve in the next six months?
Charm will focus on:
- Expanding its team to accelerate product innovation.
- Enhancing its AI-driven scam and social engineering prevention models.
- Forging strategic partnerships with banks and digital platforms.
- Broadening market reach to increase adoption of its scam prevention technology
- Release the HVE research (Exploits of Human Vulnerabilities & Exposures)
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Focus on becoming validation-obsessed. Deeply understand and continuously validate your market’s needs. Companies with clear, market-validated solutions find it significantly easier to attract funding, even in challenging economic times. Additionally, embrace a “lean and mean” mindset—carefully manage resources, remain agile, and prioritize sharp execution over expansive growth.
Where do you see the company going in the near term?
We envision a bright future for Charm Security, significantly impacting organizations and their customers by protecting them from scams and social engineering. Over the coming months, our primary focus will be on scaling our platform, deepening strategic partnerships, and amplifying our market presence to meaningfully reduce fraud losses, enhance trust, and improve customer security across New York City, the broader United States, and globally.
What’s your favorite spring destination in and around the city?
Central Park is my favorite springtime spot in New York City. It’s hard to beat the beauty of blossoms, the vibrant atmosphere of people enjoying warmer weather, and the fresh burst of life throughout the park. It perfectly captures the spirit of renewal and energy that makes spring in New York so special.
