Former Tesla product manager wants to make counterfeiting of luxury goods impossible, starting with the chip | TechCrunch

The counterfeit goods crisis has 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 buying is genuine. Veritas wants to solve both problems with a solution that combines its own hardware and software.

The startup claims to have developed a hacker-resistant chip that cannot be bypassed by devices such as Flipper Zero, a widely available hacking tool that can be used to tamper with wireless systems. These chips are linked to 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 a variety of artistic mediums, including mixed media painting and metal sculpture. She also worked at Tesla as a technical product manager and held multiple roles in business development, community growth and product management at technology companies and venture funds.

Holland noted that luxury goods manufacturers have traditionally used various symbols or physical marks to authenticate their products. However, as the demand for these goods grew, counterfeiters learned to create convincing copies of these brands along with high-quality fake certificates. These goods are often called “super fakes”.

Holland mentioned that she has spoken to houses — established luxury fashion houses — who said some of their locations have had to stop authenticating merchandise because fakes are becoming too convincing to reliably detect. She said she wanted to solve the problem based on her experience in both the tech and art worlds.

“For me, as someone who has a background in design and also has a background in technology, I saw this problem and thought about different ways to solve it. I think what’s really innovative is that we’ve used and combined elements from both hardware and software to create this solution that helps protect brands in this way of communicating information,” she said.

“When I think about counterfeits and I think about the most famous and oldest brands,” she added, “many 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 various designers to create a chip that minimally disrupts the product creation process. The chip is the size of a small gem and can easily be inserted after the product is manufactured without compromising its integrity. The chip includes NFC, or Near Field Communication — the same short-range wireless technology used in contactless payments. This means you can tap an item with your smartphone to verify its authenticity.

Holland said the startup developed its own coil and bridge structure for safety purposes. If someone tries to tamper with the product, the chip will stop working and hide the codes related to the product. On the software side, product information is linked to the Veritas back-end, which monitors scanning behavior to prevent fraud. The company is also creating a blockchain-based digital clone of the product for possible digital art gallery exhibitions or metaverse activities.

The company didn’t say who it’s working with, but said brands can use its software suite to get information about all chipped products, add team members to manage items, and add product information along with a product story — details that can also be used to connect with their community. The startup said some partners use this to engage customers through exclusive invitations or early access to new products.

While the counterfeit market is large, Holland thinks the market still needs to be educated on why it needs robust technological solutions.

“It’s shocking to see that some of the off-the-shelf solutions like NFC chips that brands use are actually so vulnerable and easily bypassed. That’s the one thing most people don’t know and we want to educate the ecosystem to adopt more secure solutions,” Holland said.

Veritas said it has raised $1.75 million in pre-funding led by Seven Seven Six, along with Doordash co-founder Stanley Tang, Reys skincare brand co-founder Gloria Zhu and former TechCrunch editor Josh Constine. The company plans to use the funding to expand its two-person team.

Alexis Ohanian of Seven Seven Six said he was impressed by Holland’s combination of design flair and technological know-how. He thinks brands know counterfeit goods are a problem and are constantly looking for robust solutions.

“It’s absolutely an arms race (against counterfeiters), but we’re used to fighting them and winning in technology all the time — and luxury brands need all the help they can get,” Ohanian said.