Pondera Solutions has been on a fast track almost from the moment it brought its fraud-detection software to market in 2013, and it’s poised for more growth in 2018.
In the past three months, the Gold River company has added more employees, and Pondera co-founder and CEO Jon Coss said last week that the company plans to move into new local offices in the first half of next year, effectively doubling its current 3,700 square feet of work space.
While the privately held firm does not disclose annual revenues, Coss said percentage earnings have increased by triple digits annually.
“We’re definitely in a growth market,” Coss said. “Government agencies have decided to separate the fraud, waste and abuse component ... There are better systems available, and government agencies are starting to hold companies like us much more accountable.”
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Pondera’s cloud solution has proved popular in California and other states looking to detect, investigate and enforce penalties in a sprawling landscape of fraud, waste and abuse in government programs, carried out by an increasingly tech-savvy group of scammers.
In 2015, Pondera’s services were used by the California Employment Development Department with a goal of detecting fraudulent unemployment benefit recipients. Today, Coss said Pondera’s software solution is utilized in four of the top 10 Medicaid states, comprising more than a third of the nation’s Medicaid beneficiaries.
Overall, Pondera is operating in about 35 government programs, including health care and social services, in eight states. The smaller contracts are worth about $300,000 per year, and the larger ones about $6 million annually.
Greg Loos, recently promoted to Pondera’s president, noted that the firm’s growth to date has occurred without a sales staff. That will change next year with planned local hires to staff sales and marketing. Employee growth also is planned at Pondera’s offices in Tallahassee, Fla.
“We’re also interested in expanding into federal government,” Loos said.
Pondera does not disclose its company-wide number of employees, saying only that it has “more than 50” among nine states, with the bulk of those in California and Florida.
Coss said more states are moving away from the old “pay and chase” way of operating, opting for state-of-the-art fraud-detection technology that can save money and time.
In years past, agencies would typically discover fraud after payments had been processed. With Pondera’s fraud-detection technology – Fraud Detection as a Service, or FDaaS for short – millions of claim records, claimants and employers can be cross-referenced with Social Security numbers, unusual claim patterns and other key data to raise red flags on suspected cases of fraud, before payments go out.
Coss and Loos explained that the company’s fraud-detection software continues to evolve and become more sophisticated. In October, Pondera announced that it had integrated its fraud-detection solution with Microsoft Azure.
Besides fraud detection, Pondera also touts investigation and enforcement services. Its Special Investigations Unit employs certified fraud examiners, data mining experts, statisticians, former government program integrity managers and law enforcement agents.
Since its founding in 2011, Pondera’s growth also has been fueled by investment capital, including an eight-figure investment this year from San Francisco-based private equity firm Serent Capital.
In September, Pondera announced that Harvard University professor and author Malcolm Sparrow had been appointed to the company’s newly formed board of directors as the firm’s first independent director.
Sparrow is regarded as an international expert on government fraud control and law enforcement issues. He is professor of the Practice of Public Management at Harvard’s John F. Kennedy School of Government and faculty chair of Harvard’s executive program, “Strategic Management of Regulatory & Enforcement Agencies.”