The counterfeit goods crisis cuts both ways. Luxury brands are losing more than $30 billion per year of fakes, while buyers are booming $210 billion second-hand market there is no reliable way to verify that what they are buying is real. Veritas wanted to solve both problems with a solution that combines conventional hardware and software.

The startup claims it has developed a “hack-proof” chip that can’t be bypassed by devices like Flipper Zero, a widely used hacking tool that can be used to tamper with wireless systems. These chips are linked to digital certificates to verify the authenticity of the products.

Vertitas founder Luci Holland has experienced life as a technologist and artist. He works in a variety of art mediums, including mixed media painting and metal sculpture. He also worked at Tesla as a technical product manager and has held numerous business development, community growth, and product management roles at technology companies and venture funds.

Holland noted that traditionally, luxury goods manufacturers used various symbols or physical marks to authenticate their products. However, with the growing demand for these products, counterfeiters have learned to make convincing copies of these marks along with high-quality fake certificates. These things are often called “superfakes.”

Holland mentioned that he has spoken to maisons — established luxury fashion houses — who say some of their locations have had to stop authenticating items because fakes have become too convincing to spot. He said that using his experience in the tech and art world, he wanted to solve the problem.

“For me, as someone who has a background in being a designer and then also has experience in technology, I see this problem and think about different ways to solve it. I think what is the real innovation is that we use and combine elements from hardware and software to make this solution that helps protect brands in this way to provide information,” he said.

“When I think of counterfeiting and I think of the most iconic and legacy brands,” he added, “many of these brands have been around for over 100, 150 years. These brands deserve the most advanced protection to protect these designs.”

Veritas worked with various designers to create a chip that would minimally disrupt the product manufacturing process. The chip is the size of a small gem and can easily be inserted even when a product is finished 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.

Holland says that for security purposes, the startup developed a custom coil and a bridge structure. If someone tries to tamper with the product, the chip goes to sleep and stores codes related to the product. On the software side, product information is linked to the Veritas back end, which monitors scanning behavior to prevent fraud. The company is also creating a blockchain-based digital clone of the product for possible digital art gallery shows or metaverse events.

The company did not reveal who worked on it, but said that brands can use its software suite to get information about all chipped products, add team members to manage things and add product information along with the product story – details that can also be used to connect with their community. The startup says some partners use it to attract customers through exclusive invitations or early access to new products.

While the counterfeit market is large, Holland thinks the market still needs education on why it needs strong technology solutions.

“It is surprising to see that some of the solutions on the shelf, such as the NFC chips used by brands, are in fact very weak and easily bypassed. This is something that most people do not know, and we want to teach the ecosystem to adopt more secure solutions,” said Holland.

Veritas said it raised $1.75 million in pre-seed funding led by Seven Seven Six, along with Doordash co-founder Stanley Tang, Reys skincare co-founder Gloria Zhu, and former TechCrunch editor Josh Constine. The company plans to use the funding to expand its two-person team.

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

“It’s absolutely an arms race (against counterfeit manufacturers), but we’re used to fighting it and always winning with technology — and luxury brands need all the help they can get,” Ohanian said.