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 in online marketplaces, according to people familiar with the matter and records reviewed by CNBC.
The potential acquisition would come at a key time for America’s largest retailer, as new 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 grow profits faster than sales, and has helped it grow its e-commerce business, which grew 25% in the U.S. during the most recently reported quarter.
The company said it has added hundreds of millions of product listings to the platform in recent years, growth that experts say is increasing the need for tools to detect issues with items.
R&A Data has worked with Walmart as a third-party vendor since at least 2024, helping the company screen listings in its online marketplace for compliance issues, such as counterfeiting, based on people and records. After working with the tech startup, Walmart decided to acquire it, CNBC has learned.
Additional details about a possible deal were not immediately clear. Walmart, which is scheduled to report third-quarter financial results 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 relaxed its seller and product verification controls over time as it sought to grow the platform and take market share from Amazon. Third-party online sales have become a key growth engine for Walmart, as the retailer strives to offer a greater variety of items to a broader base of shoppers.
During its investigation, CNBC discovered at least 43 third-party sellers who had used another company’s identity to open their account. CNBC authenticated 20 beauty products and supplements offered by sellers who had used a different company’s identity, and all of those products were found to be counterfeit, based on the brands that make the products or outside lab testing.
After CNBC shared the results of its investigation, Walmart said “Trust and security are non-negotiable for us.”
“Counterfeiters are bad actors who target 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 have a zero-tolerance policy for banned or non-compliant products and continue to invest in new tools and technology to ensure only trusted and legitimate items reach our customers.”
How Retailers Prevent Counterfeits – and Where R&A Fits In
To combat counterfeits and other scams, markets typically need a two-pronged approach, experts have previously told CNBC. They said platforms must have strict onboarding and vetting protocols to ensure bad actors don’t join in the first place, as well as ongoing listing monitoring to prevent the sale of unsafe, counterfeit or illegal products.
An acquisition of R&A by Walmart could help it monitor the hundreds of millions of product listings it hosts on its platform to ensure they comply with its rules, according to people familiar with the matter.
Founded in 2022 by entrepreneurs Noam Rabinovich and Raz Abramov, both former members of the Israeli military’s intelligence unit, R&A Data uses artificial intelligence to monitor registration compliance, according to sources., the founders’ LinkedIn profiles, interviews they have given in the past, and the R&A website.
There is little public information about R&A Data, but its website, which was shut down over the past two months, described the company as “your partner in wallet security.”
“Scan millions of listings and products at blazing speed, with incredible accuracy; our AI-powered platform delivers trusted, reliable protection, at scale,” the website said, according to an archive of the page captured on September 5.
Those interested in the software could submit their contact details for more information, but the website said early access registration was “full” and it was “not accepting any additional registrations.”
“If you would like to be considered for access in 2025, please submit your contact details,” the website states.
Rabinovich and Abramov previously founded another company, EverC, which helps online platforms and other businesses detect and remove risky merchants, money laundering schemes, counterfeit, illegal and dangerous products, and other compliance issues, according to its LinkedIn page. Rabinovich left the company in October 2022, while Abramov left in February 2023, according to their LinkedIn pages.
— Additional reporting from CNBC Paige Tortorelli.