The former Tesla production manager wants to make luxury goods impossible to counterfeit, starting with the chip

The counterfeit goods crisis has two paths. 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 are buying is authentic. Veritas wants to solve both problems with a solution that combines custom hardware and software.

The startup claims to have developed a “hacker-resistant” chip that cannot be bypassed by devices like the Flipper Zero, a widely available hacking tool that can be used to manipulate wireless systems. These chips are linked to digital certificates to verify the authenticity of the products.

Vertitas founder Lucy Holland has experienced life as a technologist and artist. She works in various artistic media, including mixed media painting and metal sculpture. She also worked at Tesla as a Technical Product Manager and held various roles in business development, community growth, and product management at technology companies and venture funds.

Holland noted that luxury goods makers traditionally use various symbols or physical markings to verify the authenticity of their products. But as demand for these goods increased, counterfeiters learned how to create convincing copies of these marks along with high-quality counterfeit certificates. These goods are often called “super fakes.”

Holland mentioned that she spoke with Maisons — established luxury fashion houses — who said some of their sites had to stop verifying the authenticity of merchandise because counterfeits had become too convincing to be reliably detected. She said that, drawing on her experience in the world of technology and art, she wanted to solve the problem.

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

“When I think about tradition and I think about the most iconic and legacy brands, a lot of these brands have been around for more than 100 or 150 years. These brands deserve the most advanced protection to protect these designs,” she added.

Veritas worked with different designers to create a chip with minimal intervention in the product creation process. The chip is the size of a small jewel and can be easily inserted even after the product has been 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 your smartphone on the item to verify its authenticity.

For security purposes, the startup developed a custom coil and bridge structure, Holland said. If someone tries to tamper with the product, the chip goes dormant and hides the codes related to the product. On the software side, product information is linked to Veritas’ backend, which monitors scanning behavior to prevent fraud. The company is also creating a blockchain-based digital version of the product for potential digital art gallery shows or metaverse activities.

The company didn’t reveal who it’s working with, but said brands can use its software suite to get information about all segmented products, add team members to manage items and add product information along with the product story — details that can also be used to communicate with their community. Some partners are using this to engage customers through exclusive invites or early access to new products, the startup said.

Although the counterfeit market is large, Holland believes the market still needs to be educated on why it needs robust technical solutions.

“It’s shocking to see that some shelf solutions, like the NFC chips that brands use, are actually very vulnerable and can be easily bypassed. This is 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 seed funding led by Seven Seven Six, along with Doordash co-founder Stanley Tang, skincare brand Reys co-founder Gloria Zhu, and former TechCrunch editor Josh Constine. The company plans to use the funding to expand its two-person team.

Seven Seven Six’s Alexis Ohanian said he was impressed by the combination of Holland’s design flair and technological expertise. He believes that brands know that counterfeit goods are a problem and are constantly looking for strong solutions.

“It’s definitely an arms race [against fake goods makers]“But we’re used to fighting these things and constantly winning in technology — and luxury brands need all the help they can get,” Ohanian said.