Financial AI startup Casap raises $56 million to help banks stop an explosion of customer fraud

Credit card fraud is changing shape. The old version was mostly outsiders stealing card data and running up charges. Now, according to Casap, cardholders themselves account for nearly a third of fraudulent transactions.

That shift has created a painful new problem for banks and card companies. Consumer protection rules are built to shield people from real fraud, but they also make it hard to push back when a customer is lying about a purchase. In practice, many institutions just pay out if the dispute is small enough. Shanthi Shanmugam, Casap’s CEO and co-founder, says that cutoff is typically around $30, though it can be higher when banks decide an investigation isn’t worth the trouble.

Casap is pitching software that changes that calculation. The startup says its AI, trained on multiple large models and wrapped in a dispute-specific system, helps issuers handle chargebacks and first-party fraud claims faster and with better results. It says customers have cut first-party fraud losses by as much as 51%, raised their chargeback win rate to 96% from an industry average of 60%, and shortened dispute resolution to 8 days on average. Traditional methods, Shanmugam says, can take as long as 90 days.

On Wednesday, the company said it raised a $56 million Series B led by Base10 Partners. That brings total funding to $90 million since Casap launched in 2023. Synchrony and Experian joined the round as strategic investors, and existing backers include Lightspeed Venture Partners, Emergence and Primary. Casap declined to say what valuation it got.

The company is already looking beyond disputes. It plans to use the new capital to move into adjacent back-office work for banks and card companies, including customer complaints and collections. That’s a sensible move. If a startup can make banks faster at saying “no” to bad claims, there’s probably plenty more paperwork waiting in line.