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It’s No Lie: Startups Fighting Disinformation Are Raking In Cash

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If you spend time online, then invariably much of it goes toward consuming lies and half-truths. Even if you are good at filtering these things out, it’s likely others in your circle are not.

As we well know, misinformation has consequences. Hard-earned money evaporates in get-rich-quick scams. Patients reject proven therapies in favor of quack cures. And targets of false smears contend with long-term reputational damage.

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So what to do? As with most societal problems that technology has a prime role in propagating, innovators believe tech will also play a major part in mitigating its spread.

Venture backers are on board as well. Over the past couple of years, investors have put over $300 million into an assortment of startups working on ways to combat disinformation and misinformation, according to an analysis of Crunchbase data. We list a sample set of 14 below:

Misinformation is a growth market

Generally, when we see a surge in venture capital around a theme, it’s tied to at least one of two factors. First, the problem founders are addressing has gotten worse. And second, the technologies founders are using to address these problems have gotten better.

For misinformation, one can point to both a worsening problem and advancing technology. There’s also some sense of urgency as the targets of attacks realize how hard it is to undo the damage after the fact.

“The markets changed, the world changed, and now a lot more potential clients understand the situation,” said Gideon Blocq, CEO and co-founder of VineSight, an Israeli software-as-a-service startup that secured a $4 million seed round in September. The company uses AI to identify suspicious patterns of digital content sharing, with a focus on spotting damaging narratives before they spread too far.

VineSight is one of several funded startups that pitches its offering to brands to help manage their online reputations. Nonprofits, celebrities and their affiliates, digital content platforms, and governments are also target markets for developers of tools aimed at ferreting out misinformation.

It’s a growing problem. Political misinformation is up 150% this past year, observed Noam Schwartz, CEO and co-founder of ActiveFence, a developer of technology to detect malicious content online. He points to Russian disinformation around the invasion of Ukraine, along with rising disinfo around elections and health care.

“Most disturbing is how we’ve seen online hate speech and extremism spilling from the digital world into the physical one, as we saw in the attack on the Brazilian capital on Jan. 8 this year,” he noted.

In addition to the increase in misinformation across political, health and other segments, new laws and regulations are also spurring interest in tools to combat the surge, Schwartz said. The Digital Services Act in the EU should have a particularly strong impact, as it carries fines of up to 6% of a company’s annual global revenue for noncompliance, he added.

Largest funding recipients

Judging by sums put to work, venture investors see this as a lucrative addressable audience.

One of the largest funding recipients, New York- and Tel Aviv-based ActiveFence, has raised $100 million in known funding to date. The company sells its offering to social media, streaming and gaming platforms, with an eye to fostering safer environments to while away our online hours.

Another venture capitalist favorite, San Francisco-based Primer, has raised $168 million to date for natural language processing technology designed to pull insights from vast amounts of data, with applications including detecting disinformation. The company counts the defense and intelligence agencies among its customers, as well as consumer brands.

In addition to disinformation campaigns, developers like Primer and VineSight are on the lookout for emerging narratives that could harm an organization’s reputation. Primer, for example, points to a situation in which it detected a damaging narrative around harmful packaging chemicals that was threatening the reputation of a fast-food chain. In that case, just detecting the meme was not enough — the company also moved quickly to announce a policy change to address concerns.

Is tech up for the task?

Not everyone is convinced today’s technologies are up to the task of sifting out the astounding number of falsehoods and misleading information served up online.

“Ferreting out misinformation through tech is a really hard problem, on multiple levels,” said Ethan Zuckerman, a University of Massachusetts professor of public policy, communication and information. “First, you have to agree on what is misinformation. Sometimes that’s easy. Often it’s complex and subjective. And even if you can do it for big conspiracy theories, it’s hard to do misinfo debunking for local stories all over the world.”

Another problem Zuckerman points out is much of what we might consider misinformation is more propagandistic than explicitly false. One can, for instance, weave a narrative that isn’t exactly a lie but does leave out key facts or dissenting viewpoints.

For Blocq and VineSight, the solution lies in focusing on the source of information, rather than fact-checking the content itself. Just as we might expect a $10 luxury designer bag for sale on a street corner to be a fake, even without close examination, we should be wary of content that can be traced to known suspect sources.

Blocq is optimistic that startups can make a major contribution to stemming the tide of disinformation. But, like many who study the space, he’s also worried that more realistic deep fakes, glib AI writing tools, and other emerging technologies are also making it easier for nefarious actors to spin out falsehoods faster and more effectively.

Illustration: Dom Guzman

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