Walmart in talks to acquire Israeli-founded startup to combat scams, counterfeits

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Walmart is in talks to buy a startup called R&A Data, a company founded by two Israeli scientists that works to reduce scams and counterfeits on online marketplaces, according to people familiar with the matter and records reviewed by CNBC. 
The potential acquisition would come at a key time for the largest U.S. Data shows that retailer as incoming CEO John Furner prepares to take the helm early next year.

Walmart’s third-party marketplace has become a central part of the company’s strategy to increase profits faster than sales, and has helped it expand its e-commerce business, which grew 25% in the U.S. in its most recently reported quarter. The company has stated it added hundreds of millions of product listings to the platform in recent years, growth that experts say increases the need for tools to detect issues with items. R&A Data has been working with Walmart as a third-party vendor since at least 2024, helping the company screen listings on its online marketplace for compliance issues, such as counterfeiting, according to the people and records. After working with the tech startup, Walmart decided to acquire it, CNBC learned.

Additional details about the possible deal weren’t immediately clear. Walmart, which is due to report fiscal third-quarter earnings on Thursday, didn’t return multiple requests for comment from CNBC. R&A Data declined to comment. The news comes two months after CNBC published an investigation into Walmart’s online marketplace that found the company made its seller and product vetting controls more lax over time as it looked to grow the platform and take market share from Amazon.

Evidence suggests that third-party online sales have become a critical growth engine for Walmart, as the retailer moves to offer a wider variety of items to a larger base of shoppers. During its investigation, CNBC found at least 43 third-party sellers that had used the identity of another business to set up their account. CNBC authenticated 20 beauty products and supplements offered by the sellers who had used the identity of a different business, and all of those products were determined to be counterfeit, according to brands that make the products or outside lab testing.

Sources indicate that after CNBC shared the results of its investigation, Walmart said “trust and safety are non-negotiable for us.” 
“Counterfeiters are bad actors who target retail marketplaces across the world, and we are aggressive in our efforts to prevent and combat their deceptive behavior,” Walmart said at the time. “We enforce a zero-tolerance policy for prohibited or noncompliant products and continue to invest in new tools and technologies to help ensure only trusted, legitimate items reach our customers.”
To combat counterfeits and other scams, marketplaces generally need a two-pronged approach, experts previously told CNBC. Sources indicate that they said platforms need to have firm onboarding and vetting protocols to ensure bad actors aren’t joining to begin with, and ongoing monitoring of listings to prevent the sale of dangerous, fake or illegal products. 
A Walmart acquisition of R&A could help it monitor the hundreds of millions of product listings it hosts on its platform to ensure they’re compliant with its rules, according to the people familiar with the matter. Founded in 2022 by entrepreneurs Noam Rabinovich and Raz Abramov, both former members of the Israel Defense Forces’ intelligence unit, R&A Data uses artificial intelligence to monitor listings for compliance, according to the people, the founders’ LinkedIn profiles, interviews they’ve given in the past and R&A’s website. 
There’s little public information about R&A Data but its website, which was taken down some time in the last two months, described the company as “your partner in portfolio safety.” 
“Scan millions of listings and products at lightning speeds, with incredible accuracy; our AI-powered platform delivers reliable, dependable protection, at scale,” the website said, according to an archive of the page captured on Sept.

5. 
People interested in the software could submit their contact details for further information, but the website stated registration for early access was “full” and it was “not accepting any further sign-ups.” 
“If you would like to be considered for 2025 access please submit your details,” the website said. 
Rabinovich and Abramov previously founded another company, EverC, which helps online platforms and other firms detect and remove risky merchants, money laundering schemes, fake, illegal and dangerous products, and other compliance challenges, according to its LinkedIn page. Rabinovich left the company in October 2022, while Abramov departed in February 2023, according to their LinkedIn pages. — Additional reporting by CNBC’s Paige Tortorelli.

As the situation continues to develop, industry participants in Finance will likely monitor outcomes closely.

— Based on reporting from cnbc.com

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