As of 2020, the clothing sector lost about $27 billion in annual sales due to counterfeits, an illicit trade that results in huge losses to both brands and buyers. Clothes, accessories and luxury goods are the most popular product items for counterfeiting, according to the 2022 intellectual property crime threat assessment report. But that’s not where the problem starts and ends: the explosion of digital content has also led to a wide number of digital counterfeiters as well.
Image Credits: MarqVision (opens in a new window) under a license.
MarqVision has built an AI-powered intellectual property (IP) protection platform that monitors both e-commerce marketplaces and digital content, automatically detecting counterfeits and removing them from online sales and distribution. And now, the startup has raised $20 million in Series A funding to continue expanding its platform.
The company, based in Los Angeles and originally incubated at Y Combinator, says its customers — which include fashion labels like Ralph Lauren and Kangol, LVMH, crystal icon Baccarat, as well as media behemoth Pokemon — use MarqVision to scan places where their brands are most likely to be misappropriated.
These include the top 1,500 online marketplaces globally, as well as popular social media platforms that are becoming increasingly used for commerce, NFT platforms, gaming sites and other places where counterfeit products might appear. It says that its tech is already leading to more than 20,000 enforcements weekly. Its founding team has roots in Asia — specifically Seoul — and it claims to have the most extensive IP enforcement platform in the region, an important point given that some 90% of counterfeit sales globally are traced back to Asia.
DST Global Partners and Atinum Investment led the latest funding along with its existing backers SoftBank Ventures, Bass Investment and Y Combinator. The Series A funding brings its total raised to $25 million, including a seed round of $5 million in 2021. The company is not disclosing its valuation.
The challenge that MarqVision is tackling is the speed and scale of counterfeit sales.
Millions of counterfeits are traded in real-time, and the opportunity, so to speak, is wide: it impacts both small and large brands and selling platforms. Companies like Amazon have developed extensive IP protection strategies over the years to proactively track and take down fake goods, but the argument here is that even this is not enough (and that’s saying nothing of the thousands of platforms smaller than Amazon that lack the resources to manage this on their own).
In other words, as with any digital challenge, the problem with fake goods — be it products or content — is one of outsized scale, one that is hard, if not impossible, for humans alone to tackle.
Lee and CBO of MarqVision DK Lee, with other friends from Harvard and MIT, founded MarqVision in 2020. Lee approached the problem initially from a legal perspective when he was still a Harvard law student. Interested in the field of IP, he realized that counterfeiting …read more