US-Israeli payroll unicorn buys Tel Aviv AI cyber startup to combat fake hires

Sharon Wrobel is a tech reporter for The Times of Israel

American-Israeli payroll unicorn Deel, the developer of a payroll and HR platform, said Monday it agreed to buy Tel Aviv deepfake detection startup Clarity to help businesses tackle the AI-driven security threat posed by fake job candidates.

No financial terms were disclosed, although sources put the price tag at around $45 million to $50 million. The deal marks Deel’s 15th acquisition and its first in Israel.

Founded at the end of 2022 by CEO Michael Matias, CTO Natalie Fridman and CSO Gil Avriel, with R&D headquarters in Tel Aviv, Clarity has developed software to detect and protect against deepfakes, to help businesses ensure that the individuals they hire are genuinely who they claim to be, and to prevent bad actors from gaining employment and access to sensitive systems.

In the aftermath of the October 7, 2023, onslaught, when Hamas terrorists rampaged through southern Israel, killing around 1,200 people and taking many hostages, Clarity worked with the Israeli government to authenticate sensitive video footage. AI researchers at Clarity helped verify the authenticity of war footage and testimonials of hostages from the assault, as a flurry of videos and images circulated on social media platforms, some shot by Hamas terrorists, some by Gaza residents, and some created by generative AI tools for manipulation and deception purposes.

To date, Clarity has raised $16 million from investors, including Walden Catalyst Ventures and Bessemer Venture Partners, with participation from Fusion, Secret Chord Ventures, Ascend Ventures, and Flying Fish Partners.

As part of the acquisition, Clarity’s proprietary AI technology and engineering team will join Deel, to build in-house identity and security tools, from pre-hire biometric identity verification, deepfake detection, background checks, and behavioral analysis to the provision of computing equipment for new hires and the management of secure employee access post-onboarding.

“Deepfakes, identity fraud, and impersonation attacks are becoming more sophisticated, changing how companies hire and grow globally,” said French-Israeli entrepreneur Alex Bouaziz, co-founder of Deel. “Bringing Clarity and its world-class AI talent into Deel gives us the capabilities to build trusted identity security directly into our platform.”

“This lets customers confidently hire, onboard, and manage verified teams globally, with continuous safeguards that evolve as threats get smarter,” said Bouaziz.

Founded in 2019 by Bouaziz, who studied at Haifa’s Technion, and Shuo Wan, Deel is the developer of a global payroll and compliance platform designed to simplify hiring, paying, and managing employees, no matter where they are based. The firm said its platform helps more than 40,000 businesses to hire and pay teams in over 150 countries. The unicorn, which has about 7,500 employees working remotely, was last valued at about $17 billion with an annual revenue run rate of more than $1.5 billion.

The threat of employment fraud has become more pressing in an era where faces, voices and documents can be faked in real time, and deepfakes can be used to participate in online job interviews with the emergence of generative AI tools.

Deepfake technology uses deep learning to create seemingly realistic renderings of real people and their voices. Generative AI models and chatbots such as ChatGPT are being used by bad actors in creating deepfakes quickly, using sophisticated tools that are widely accessible at low or no cost. By 2028, one in four job applications that companies receive will be fake, according to Gartner research.

In recent years, impersonation attacks during the hiring process have emerged as a rapidly growing source of cyber threats. Last week, the US State Department and the FBI warned that North Korea is operating a network of skilled IT workers—based both within and outside the country — who pose as citizens of other nations to secure employment via online platforms. Once hired, they gain access to internal systems, sensitive data, and critical infrastructure for espionage, data theft, fraud, or malicious activities.

“Trust shouldn’t end after a background check on day one,” said Clarity CEO Matias. “We built Clarity to continuously verify identity in an era where AI makes fraud more convincing than ever.”

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