Walmart is in talks to acquire R&A Data to fight counterfeit products in the market

Walmart CNBC is in talks to buy a startup called R&A Data, a company founded by two Israeli scientists that works to reduce fraud and counterfeiting in online marketplaces, according to people familiar with the matter and records reviewed by CNBC.

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

The company said it has added hundreds of millions of product listings to the platform in recent years, a growth that experts say increases the need for tools to detect problems with items.

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

Additional details about the potential deal were not immediately clear. Walmart, which is scheduled to report fiscal third-quarter earnings on Thursday, did not return 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 made its seller and product screening controls more lax over time as it looked to grow the platform and take market share from Amazon. Online third-party sales have become a critical growth driver for Walmart, as the retailer moves to offer a wider variety of items to a larger base of shoppers.

During the investigation, CNBC found at least 43 third-party sellers who used another company’s identity to set up their accounts. CNBC documented 20 beauty products and supplements offered by sellers who used a different company identity, and all of these products were determined to be counterfeit, according to the brands that make the products or third-party lab tests.

Walmart said after CNBC shared the results of its investigation “Trust and safety are non-negotiable for us.”

“Counterfeiters are bad actors targeting retail markets around the world, and we are resolute 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 technologies to help ensure only trusted and legitimate items reach our customers.”

To combat counterfeits and other scams, markets generally need a two-pronged approach, experts previously told CNBC. They said platforms need strict onboarding and screening protocols to ensure bad actors don’t join initially, and continuous monitoring of listings to prevent the sale of dangerous, counterfeit or illegal products.

Walmart’s acquisition of R&A 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 listings for compliance, according to the people., The founders’ LinkedIn profiles, past interviews and the R&A website.

There is little public information about R&A Data, but its website, which was taken down sometime over the past two months, described the company as “your partner in portfolio safety.”

“Scan millions of listings and products at lightning speed and with incredible accuracy; our AI-powered platform provides reliable and widely relied upon protection,” the site said, according to an archive of the page taken on September 5.

People interested in the program can provide their contact details for more information, but the site said early access registration was “full” and that it was “not accepting any further registrations”.

“If you would like to be considered for 2025, please submit your details,” the website said.

Rabinovich and Abramoff previously founded another company, EverC, which helps online platforms and other businesses detect and remove dangerous merchants, money laundering schemes, counterfeit, illegal and dangerous products, and other compliance challenges, according to its LinkedIn page. Rabinowitz left the company in October 2022, while Abramoff left in February 2023, according to their LinkedIn pages.

– Additional reporting from CNBC Big Tortorelli.