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How AI Is Powering the Fight Against the $900B Counterfeit Industry

August 24, 2017

9:20 am

Criminals have it rough these days.

Modern technology has made it impossible to get away with anything, from shoplift-deterrent sensors to ever-cheaper security cameras to social media footprints chipping away at anonymity. Now even the global $900 billion shadow economy behind counterfeiting luxury goods is in danger: AI startup Entrupy is the first company to try curbing the trafficking of counterfeits (and restore trust to resale markets in the process) using artificial intelligence.

Vidyuth Srinivasan, CEO and cofounder of Entrupy, spoke with me about this fascinating industry, how a cross-country motorbike ride proves the importance of stopping counterfeits, and the biggest challenge they’ve overcome so far.

What led you to cofound this company?

When I started Entrupy alongside my cofounders Ashlesh Sharma and Lakshmi Subramanian, we set ourselves a goal of building a scalable and versatile technology solution to combat the second oldest problem of humanity, counterfeit goods. We all grew up in India and were all personally exposed to this problem at various levels. I even had incidents where I had I had a new battery fail on me when riding cross-country on my motorbike – on face-value, there’s a very small difference between a counterfeit car battery and a brake-pad; but the consequence could cost your your life. So at the outset, we looked at how technology could be utilized in a unique manner to help protect multiple industries and consumers from counterfeits. We also wanted to build something that would last beyond life-cycles of individual industries, standing the test of time and scale.

Hence we built Entrupy in response to the $900 billion global counterfeiting industry, which is causing not only brand dilution but contributing to things like organized crime and child labor. Using technology, we’re able to combat counterfeiting in a unique way that is more accurate, consistent and versatile than other solutions currently being deployed.

Simultaneously, we learned about the need for trust within secondary market transactions. The resale market is particularly vulnerable to counterfeits, and through Entrupy’s authentication services, we’re able to help resellers sustain growth by establishing trust in their inventory.

What types of counterfeits do you catch?

Currently Entrupy authenticates handbags and wallets from Balenciaga, Burberry, Celine, Chanel, Dior, Fendi, Goyard, Gucci, Hermes, Louis Vuitton and Prada. These brands are some of the most counterfeited in the world, and we are constantly expanding our database to cover more and more top brands that are susceptible to counterfeits. Counterfeits are of varying quality and we have designed our system to catch a huge range – from low quality ones to the top-notch ‘1:1’ fakes.

While luxury goods are currently our focus, we plan to expand Entrupy’s reach to include other commonly counterfeited products such as watches, sneakers or electronics.

What made AI the right choice for your service?

Our AI-powered algorithms are constantly learning the minute differences between a real and a fake product based on microscopic data that we collect, which means Entrupy is constantly getting better at asserting authenticity – we’re up to 98.5 percent accuracy now.

Entrupy works by collecting microscopic images which are in turn analyzed by our algorithms, making sense of the tiniest nuances of production, qualities like texture, contrast, topology, geometric shapes, thread-counts etc. Based on this information, we’re able to distinguish the real from the fake.

What’s the biggest challenge Entrupy has overcome so far?

Since the AI needs information inputted in order to learn, we’ve had to source thousands of counterfeits so the tool can recognize what a fake looks like. This is obviously much easier said than done. From a technical standpoint our biggest challenge has been developing customized machine learning techniques to understand fine-grained classification and segmentation.

What is the scope of the company now, and what do you envision for the future?

We recently raised a $2.6 million Series A round which we’re using to expand our product capabilities. In addition we’re focusing on increasing the number of resellers and marketplaces that feature Entrupy’s authentication services. To date, we’ve authenticated over $17 million worth of luxury goods, and we’re excited to expand our product portfolio and our breadth of global partners in the future.

Read more about advancements in artificial intelligence at TechCo

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Adam is a writer with an interest in a variety of mediums, from podcasts to comic books to video essays to novels to blogging — too many, basically. He's based out of Seattle, and remains a staunch defender of his state's slogan: "sayWA." In his spare time, he recommends articles about science fiction on Twitter, @AdamRRowe

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