Tackling the Threat: How European Startups are Combatting Deepfakes and AI Fraud

The cost of creating convincing synthetic media has collapsed – and so has society’s ability to distinguish between real and fabricated information. So what are Europe’s rising startups doing about it?

According to the latest study by Dutch cybersecurity startup Surfshark, reported losses linked to deepfakes have now surpassed €1.3 billion, with €860 million stolen in 2025 alone, up €500 million year-on-year.

As Oliver Quie, CEO of British cybersecurity startup Innerworks commented: “We’re facing AI-powered deception that can mimic legitimate users with frightening accuracy. Existing security companies have become obsolete because they assume threats will behave differently than legitimate users.”

Only a few years ago, producing a one-minute deepfake video could cost anywhere between €257 and €17k, depending on quality. With the arrival of widely accessible AI video tools such as Veo 3 and Sora 2, that same minute can now be generated for just a few euros.

This dramatic price collapse has made deception cheaper to run and far easier to scale.

Scalable deception and “lost pet” scams

As costs fall, new categories of fraud have emerged. One striking example is the lost pet scam – fraudsters now generate AI-made images of supposedly found pets, tricking anxious owners into paying small ‘recovery fees’, often around €43, in the hope of reuniting with their animals.

“As the cost of fabricating lifelike images and videos approaches zero, scammers are industrialising deception,” said Miguel Fornes, Information Security Manager at Surfshark. “The lost-pet scam is a clear example: it exploits emotion for small sums, making victims less suspicious and far less likely to pursue legal action. For criminals, that’s an ideal model for mass-scale fraud.” (Translated)

Fornes adds that such small-ticket scams are only part of the picture. The larger threat comes from deepfake-enabled investment schemes and identity spoofing.

Deepfakes have been used in corporate recruitment processes to bypass background checks, including one case where a cybersecurity company unwittingly hired a North Korean hacker who successfully faked his video interview and credentials.

A wave of European startups fights back

So how is Europe fighting back?

The surge in AI-driven deception has triggered a corresponding wave of innovation – and investment – across Europe. So far this year, EU-Startups has reported on several funding rounds targeting the detection and prevention of deepfake-enabled fraud.

• Acoru (Madrid, Spain) – Just today they raised €10 million (Series A) to help banks predict and prevent AI-powered fraud and money laundering before transactions occur. Its platform monitors pre-fraud intent signals and uses consortium-based intelligence sharing to stop scams at the source.
• IdentifAI (Cesena, Italy) – secured €5 million in July 2025 to expand its deepfake detection platform, which analyses images, video and voice to authenticate content and flag AI-generated material. The startup reports an increase in demand from newsrooms and law-enforcement clients since early 2024.
• Trustfull (Milan, Italy) – raised €6 million in July 2025 to broaden its fraud-prevention suite to cover “deepfake scams and large-scale phishing campaigns.” The company said this is a pivotal moment for the global fraud detection and prevention market, which is projected to nearly triple from €28.4 billion in 2024 to €77.4 billion by 2030.

• Innerworks (London, UK) – raised €3.7 million in August 2025 to expand its AI-powered platform for stopping synthetic-identity and deepfake-driven fraud. The company reported that fraud attempts using deepfakes rose by over 2,000% since 2022.

• Keyless (London, UK) – closed a €1.9 million round in January 2025 to strengthen its privacy-preserving biometric technology, designed to thwart injection attacks and deepfake-based identity spoofing. It reports its clients have seen a 73% reduction in Account Takeover (ATO) fraud and 81% reduction in help desk costs.

Together, these startups reflect a continental effort to counteract a new layer of cyber-risk. Italy in particular stands out, with two active ventures in the space, suggesting a developing national cluster around biometric and deepfake-detection innovation.

Regulatory backdrop: EU policies tighten in 2025

The rising economic impact of AI-enabled deception has coincided with new EU-level measures aimed at increasing accountability and transparency in artificial intelligence and digital services.

In February 2025, the EU Artificial Intelligence Act began applying key provisions. It requires clear labelling of AI-generated content and transparency when individuals interact with AI systems. These rules directly target the misuse of generative tools for manipulation or fraud, including deepfakes and voice cloning.

AI systems that deceive or exploit vulnerable users can now be classified as posing an “unacceptable risk,” making them illegal within the EU market.

Meanwhile, under the Digital Services Act (DSA), large online platforms are now obliged to assess and mitigate systemic risks arising from manipulative or fraudulent content – a framework that extends to deepfake media used in phishing and impersonation scams.

The financial sector has also been addressed. In July 2025, the European Banking Authority (EBA) issued an opinion highlighting how AI is being exploited for money laundering and fraud, including through fabricated identities and deepfake documents. It urged financial institutions to adapt anti-money-laundering (AML) systems to account for AI-enabled risks – a move that aligns closely with the missions of startups such as Acoru and Trustfull.

Together, these policy developments show that 2025 is shaping up as the year Europe tightened its legal net around AI misuse – introducing a compliance-driven incentive for startups combating fraud and synthetic deception.

What can you do?

“AI has changed the face of fraud and money laundering. You simply cannot expect technology built in 2010 to combat fraud happening in 2025,” – Pablo de la Riva Ferrezuelo, Co‑founder and CEO of Acoru.

His words reflect a wider sentiment among Europe’s cybersecurity Founders: that a new generation of technology – built for an era of synthetic media and AI‑powered deception – is urgently needed.

This perspective is echoed across the sector.