Walmart in talks to acquire R&A Data to fight marketplace counterfeits

Walmart is in talks to acquire a startup called R&D DataIt’s a company founded by two Israeli scientists working to reduce fraud and counterfeiting in online markets, according to people familiar with the matter and records reviewed by CNBC.

The potential acquisition would come at an important time for the largest US retailer, as new CEO John Furner is set to take the helm early next year. Walmart’s third-party marketplace has become a central part of the company’s strategy to grow profits faster than sales, helping it expand its e-commerce business, which grew 25% in the U.S. in the most recently reported quarter.

The company has added hundreds of millions of product listings to the platform in recent years, and experts say this growth has increased the need for tools to detect problems with products.

R&A Data has been working with Walmart as a third-party vendor since at least 2024, helping the company scan listings on its online marketplace for compliance issues such as fraud, according to people and records. Walmart decided to acquire it after working with the company, CNBC has learned.

Additional details about the potential deal were not immediately available. Walmart, which will report fiscal third-quarter earnings on Thursday, did not respond to 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 had made seller and product review controls looser over time to grow the platform and take market share from Amazon. Third-party online sales have become a critical growth engine for Walmart as the retailer moves to offer a broader selection of products to a broader customer base.

During its investigation, CNBC found at least 43 third-party sellers who used another business’ identity to create their accounts. CNBC verified 20 beauty products and supplements offered by sellers using the identity of a different business, and all of these products were determined to be counterfeit except for the brands that produced the products or laboratory testing.

After CNBC shared the results of its investigation, Walmart said: “Trust and security are non-negotiable for us.”

“Counterfeiters are bad actors targeting retail markets around the world, and we are aggressive in our efforts to prevent and combat their deceptive behavior,” Walmart said at the time. “We maintain a zero-tolerance policy for prohibited or non-compliant products and continue to invest in new tools and technologies to ensure only trusted, legitimate products reach our customers.”

Marketplaces often need a two-pronged approach to combat counterfeiting and other scams, experts previously told CNBC. They said platforms should have robust opt-in and review protocols in place to ensure bad actors don’t join in the first place, and listings should be constantly monitored to prevent the sale of dangerous, fake or illegal products.

Walmart’s acquisition of R&D could help it monitor the hundreds of millions of product listings it hosts on its platform to make sure they comply with its rules, according to people familiar with the matter.

R&A Data, founded in 2022 by entrepreneurs Noam Rabinovich and Raz Abramov, both former members of the Israel Defense Forces intelligence unit, uses artificial intelligence to monitor lists for compliance, sources said., the founders’ LinkedIn profiles, past interviews, and the R&A’s website.

There is little public information about R&A Data, but its website, which has been taken down within the last two months, described the company as “your partner in portfolio security.”

“Scan millions of listings and products at lightning speed with incredible accuracy; our AI-powered platform delivers trustworthy, reliable protection at scale,” the website said, according to an archive of the page recorded on September 5.

People interested in the software can submit contact information for more information, but the website said early access registrations are “full” and “no further registrations are being accepted.”

“Please submit your information if you would like to be considered for 2025 access,” the website said.

Rabinovich and Abramov previously founded EverC, another company that helps online platforms and other firms detect and eliminate risky traders, money laundering schemes, fake, illegal and dangerous products and other compliance issues, according to its LinkedIn page. According to their LinkedIn pages, Rabinovich left the company in October 2022 and Abramov in February 2023.

— Additional reporting by CNBC Paige Tortorelli.