Ex-NFL Player Scores Funding For Finding Counterfeit Merchandise On Amazon & Facebook

In 2016, some $460 billion worth of counterfeit goods were bought and sold, according to the International Trademark Association. Not surprisingly, most of those transactions took place online.

To tackle this problem, Darren Woodson, a three-time Super Bowl Champion and NFL Analyst, launched Dallas-based CounterFind. The startup recently closed on a $1 million-plus round of funding and has signed on nearly 50 brands as customers. Dallas-based Green Park & Golf Ventures led the round, which also included participation from Deep Space Ventures, Austin-based Capital Factory, and Court Wescott, managing partner at Westcott LLC.

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Having grown up in inner city Phoenix, Woodson takes the problem of counterfeiting personally.

“I know what it feels like to be robbed or taken advantage of,” he told Crunchbase News. “And I wouldn’t wish that on anyone. We love being the e-commerce police.”

CounterFind’s early clients are a high-profile bunch and include the Dallas Cowboys, Universal Music Group, WWE, and California rock band Linkin Park. Linkin Park was so impressed with CounterFind’s offerings it became an investor in the company as well. And they are not the only customer to take a stake, according to Stephen Hays, founder of Dallas-based Deep Space Ventures.

“One of the things that struck me is that a significant portion of its earliest customers have become investors,” Hays told Crunchbase News. “That’s always a signal to me that something interesting is going on here. When I see a customer or a partner ask for investment rights, it’s always a good sign that somebody is on to something.”

CounterFind isn’t the only company in the space addressing this problem. But what sets it apart, according to Hays and CounterFind officials, is that it provides customized software that not only identifies counterfeit merchandise on Amazon and Facebook, but actually also gets the items taken down.

“Our Internet-based software plugs directly into each platform’s API, uses a proprietary filtering formula to find counterfeit merchandise in real-time and then shuts it all down,” said Rachel Aronson, CounterFind’s vice president of sales and business development. “We’re not a broad Internet company that does the same thing for everyone.”

Woodson initially hired an offshore development team to build out the technology.

“Darren saw a real opportunity here to solve this problem, which is a big one for the legal teams of all major brands including NFL teams, sports teams in general and those in the entertainment industry,” Aronson told Crunchbase News. “With his extensive network, we were able to essentially hand-deliver the software to the people who needed it.”

Startups Disrupt Counterfeit

As more brands grow disgruntled with the prevalence of counterfeit products online, the issue is also becoming a concern for Amazon itself in addition to brands. For example, German footwear giant Birkenstock was one of the first to make a bold move. On Jan. 1, 2017, it stopped allowing listings of its products on Amazon due to counterfeits.

An increasing number of startups are being created to address this problem through technology. Other companies in the space include Barcelona-based Red Points, which earlier this month raised $12 million in a Series B round led by Northzone. Los Angeles-based IP Shark, which describes itself as an online brand protection platform that automates the monitoring and enforcement of counterfeit products and more, raised $550,000 in a seed round of funding in January 2016. New York-based BrandShield also offers an online brand protection system and has raised a total of nearly $1.5 million since inception.

Woodson believes the fact that CounterFind is based in the United States gives it an advantage over its European competitors.

“We already have a lot of those relationships,” he said. “We know exactly what they want. And we do it with a passion.”

CounterFind plans to use the money it just raised to scale its business and expand its development team, according to COO Mike DeCoursey. The company also has plans to expand its offering to other marketplaces as well as build awareness.

“A lot of these brands just don’t know so we also still have to educate,” Woodson said. “Ultimately, we want to serve as their insurance policy of sorts. So they don’t have to worry about the problem at all.”

CounterFind also aims to make the experience personalized for each brand.

“Some want more control in the process and others want us to be their eyes,” Woodson added. “For example, the Dallas Cowboys are a totally different brand than WWE. So we’re able to personalize the shutdown process for them based on their needs and wishes.”

Deep Space Ventures’ Hays believes the prevalence of counterfeit merchandise has created a huge market opportunity for companies like CounterFind. Companies today have to go through an arduous process to get counterfeit merchandise removed.

“They have to hire a lawyer, send a cease and desist letter,” he said. “It can take a while. But CounterFind automates the process and saves customers both time, and money because the faster you get those products down, the less fake products get sold.”

Hays is also impressed with the company’s traction in a short amount of time.

“In just a few months, their growth has been incredible,” Hays said. “The company’s monthly revenue is already far beyond what you’d expect for a seed stage company.”

Joshua Baer, co-founder and executive director of Austin-based Capital Factory, agreed. (Side note: Baer first heard about CounterFind when Woodson reached out to him via Twitter and was “immediately intrigued.”) Capital Factory recently expanded to Dallas.

“They have accomplished a lot without much funding so far, which makes me really excited to see what they accomplish now that they will have some new energy and resources behind them,” he said. “This is a big problem that will continue to get bigger as more and more retail moves online.”

JR Garcia, principal of Dallas-based Green Park & Golf Ventures, believes Woodson’s charisma will lend itself well to CounterFind’s success.

“He sets a great tone in building a great company culture,” he said.

Plus, the ease of use and implementation of CounterFind’s offering has been a point of emphasis, Garcia added.

“Since this is such a large problem when they present an ‘easy button’ for brands and customers to try, it is usually a quick decision to sign up and give it a go,” he told Crunchbase News.

Assuming that CounterFind can stay on its trajectory, its future looks good. The problem of counterfeit goods clearly isn’t going away, and it seems that more startups are popping up to address the challenge.

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