The fake goods crisis cuts two ways. Luxury brands lose more than $30 billion a year to counterfeits, while buyers in the booming $210 billion second-hand market have no reliable way to verify that what they’re purchasing is genuine. Veritas wants to solve both problems with a solution that combines custom hardware and software.
The startup claims that it has developed a “hack-proof” chip that can’t be bypassed by devices like Flipper Zero, a widely available hacking tool that can be used to tamper with wireless systems. These chips are linked with digital certificates to verify the authenticity of the products.
Veritas founder Luci Holland has experienced life as both a technologist and an artist. She has worked in different artistic mediums, including mixed media painting and metal sculpture. She has also worked at Tesla as a technical product manager and has held several business development, community growth, and product management roles at tech companies and venture funds.
Holland noted that traditionally, luxury goods makers use various symbols or physical marks to authenticate their products. However, with the growing demand for these goods, counterfeiters have learned to create convincing copies of these marks along with high-quality fake certificates. These goods are often called “superfakes.”
Holland mentioned that she spoke with maisons — established luxury fashion houses — that said some of their locations had to stop authenticating goods because fakes were becoming too convincing to reliably detect. She said that drawing on her experience in both the tech and art worlds, she wanted to solve the problem.
“For me, as someone who has a background in being a designer and then also has experience in tech, I saw this problem and thought about the different ways we could solve it. I think what’s truly innovative is we’ve used and combined elements from both hardware and software to create this solution that helps protect brands in this way to convey the information,” she said.
“When I think of counterfeiting and I think of the most iconic and legacy brands,” she added, “a lot of these brands have been around for over 100, 150 years. These brands deserve the most advanced protection to protect these designs.”
Veritas worked with different designers to create a chip that is minimally disruptive to the product creation process. The chip is the size of a small gem and can easily be inserted even after a product is made without compromising its integrity. The chip incorporates NFC, or Near Field Communication — the same short-range wireless technology used in contactless payments. This means you can tap your smartphone on the item to verify its authenticity.
Holland said that for security purposes, the startup developed a custom coil and a bridge structure. If someone attempts to tamper with the product, the chip goes dormant and hides the codes related to the product. On the software side, the product information is linked to the Veritas back end, which monitors scanning behavior to prevent fraud. The company also creates a blockchain-based digital clone of the product for possible digital art gallery shows or metaverse activities.
The company didn’t reveal who it is working with, but said that brands can use its software suite to get information about all the chipped products, add team members to manage items, and add product information along with the product story — details that can also be used to connect with their community. The startup said that some partners use this to engage customers through exclusive invitations or early access to new products.
While the counterfeiting market is big, Holland thinks the market still needs education around why it needs robust tech solutions.
“It is shocking to see that some of the shelf solutions, like NFC chips that brands are using, are actually so vulnerable and could easily be bypassed. This is the one thing most people don’t know, and we want to educate the ecosystem to adopt safer solutions,” Holland said.
Veritas said that it raised $1.75 million in pre-seed funding led by Seven Seven Six, along with DoorDash co-founder Stanley Tang, skincare brand Reys’ co-founder Gloria Zhu, and former TechCrunch editor Josh Constine. The company plans to use the funding to expand its two-person team.
Seven Seven Six’s Alexis Ohanian said that he was impressed by the combination of design taste and technology expertise of Holland. He thinks that brands know that fake goods are a problem and are constantly looking for robust solutions.
“It’s absolutely an arms race [against fake goods makers], but we’re used to fighting those and consistently winning in tech — and luxury brands need all the help they can get,” Ohanian said.