Financial crime & compliance

The startups following the money

Last updated: 23 Mar 2023

Market 101

If you’re selling financial crime prevention products, business is humming. Fraud rates have jumped since 2020, forcing banks and fintechs to adopt whizzy tech to spot theft or laundering and keep on regulators’ good sides.

And as fraudsters get smarter, so must the tech keeping them out. The need for innovation in the sector is growing, with financial service providers trying to stay on the right side of Russia-related sanctions, adapt to ever-changing rules and avoid rising fines for anti-money laundering breaches.

Recent events — namely, the collapse of Silicon Valley Bank — have spread fear about the fragility of financial institutions and catapulted regulatory compliance to the top concern for corporates. Last week saw the UK’s financial watchdog write to 291 CEOs of payments firms, warning them that they would be shut down unless they urgently fix problems that pose a risk to consumers.

Financial crime-busting startups, which supply the tooling and infrastructure to detect fraud and risk, need to stay nimble too. As the downturn hits funding, we could see a decline in new fintech being created in Europe — a key customer pool for crime prevention software. Startups are also under pressure to create a new generation of products that can handle real-time data analysis. New, AI-powered competitors will emerge, and the crimestoppers need to be ready.

Early stage market map

Key facts

$214bn

Estimated global spend on financial crime compliance in 20201

$25.66bn

Size of the global fraud detection and prevention market in 2021 — estimated to reach $83.6bn by 20282

52%

Share of companies with >$10bn in revenue that experienced fraud in the last 24 months, compared to 38% of companies with <$100m revenue3

Startups tracked by Sifted

Sifted take

The global surge in fines for money laundering breaches — up 50% in the past year — tells us that regulators are serious about clamping down on online fraud. Yet new scammy avenues are being found all the time, including lately via crypto and the metaverse. With the law on its tail, and reporting requirements ramping up, the financial industry has to constantly make adjustments to boost security, adopting machine learning, biometrics and other tools for making sense of unstructured data. And while AI’s potential as a compliance tool may have been overpromised to date, new regulations, and the seemingly endless supply of grifters and swindlers, will create new opportunities for the technology to prove its worth.

Rising stars

Salv

Anti-money laundering

Total funding

€7,460,000

Tallinn, Estonia
2018

Launched by former Wise employees, it built a collaborative anti-money laundering and compliance platform. Angels include N26’s cofounder Maximilian Tayenthal and Checkout.com’s CEO Ott Kaukver.

Round

Seed

Valuation

Undisclosed


Date

2023

Size

€4,000,000

Cable

Crime & risk assessment

Total funding

€4,940,000

Remote, Remote
2020

Cofounded by Katie Savitz and Natasha Vernier, former senior employees at Monzo’s Fincrime team, it offers a digital solution for fraud monitoring and regulatory compliance.

Round

Seed

Valuation

Undisclosed


Date

2021

Size

€4,940,000

Flagright

Anti-money laundering

Total funding

€3,340,000

Berlin, Germany
2022

Backed by Y Combinator and Moonfire Ventures, it developed a no-code tool for transaction monitoring, anti-money laundering compliance and fraud prevention

Round

Seed

Valuation

Undisclosed


Date

2022

Size

€2,910,000

Ondato

Compliance platform

Total funding

€7,147,500

London, United Kingdom
2018

Backed by the likes of OTB Ventures and Startup Wise Guys, it provides a remote customer identification and KYC platform for security and compliance.

Round

Seed

Valuation

Undisclosed


Date

2022

Size

€4,747,500

Early stage startups to watch

Anybrain

Braga, Portugal
2015
Seed

5m

2.5m

-

Blinking

Belgrade, Serbia
2017
Seed

2.5m

1.3m

10m

Build38

Munich, Germany
2018
Series A

16m

13m

15m

Cable

Remote, Remote
2020
Seed

4.9m

4.9m

-

Cascade Lab SA

Luxembourg, Luxembourg
2019
Seed

1m

1m

5m

ComplyCube

London, United Kingdom
2020
Bootstrapped

-

-

-

CookieFirst

Amsterdam, Netherlands
2019
Bootstrapped

-

-

-

Croowly

Boadilla del Monte, Spain
2019
Seed

200k

750k

200k

Defentry

Stockholm, Sweden
2016
Seed

7m

2.2m

-

Elucidate

Berlin, Germany
2018
Seed

11m

7.7m

-

Flagright

Berlin, Germany
2022
Seed

3.3m

2.9m

-

Homeppl

London, United Kingdom
2017
Seed

6.8m

3m

-

KYC Hub

London, United Kingdom
2019
Seed

1.3m

1.1m

-

Linkurious

Montreuil, France
2013
Bootstrapped

-

-

-

Lunio

Manchester, United Kingdom
2018
Series A

17m

15m

-

norbloc

Stockholm, Sweden
2016
Debt

3.5m

2m

-

Nuggets

London, United Kingdom
2018
Seed

4m

1.2m

-

Ondato

London, United Kingdom
2018
Seed

7.1m

4.7m

-

Pliance

Stockholm, Sweden
2018
Pre-seed

450k

450k

-

Resistant AI

Prague, Czechia
2019
Series A

18.2m

15.6m

-

Salv

Tallinn, Estonia
2018
Seed

7.5m

4m

-

Sanction Scanner

London, United Kingdom
2019
Bootstrapped

-

-

-

spotixx

Frankfurt, Germany
2019
Bootstrapped

-

-

-

Thirdfort

London, United Kingdom
2017
Series A

22.5m

20m

90m

VOICEME srl

Milan, Italy
2021
Pre-seed

560k

560k

-

Zaver

Stockholms kommun, Sweden
2019
Series A

22m

14m

-

ZenML

Munich, Germany
2021
Pre-seed

2.3m

2.3m

-

Europe’s success stories

Who early stage startups are up against

(Pre-)Seed

SeriesA

SeriesB

SeriesC

SeriesD+

IPO/Exit

Leading Estonian AI startup that offers real-time customer identity verification to combat fraud and meet KYC regulations

Valued at $1.5bn, its cap sheet includes industry heavyweights Accel, Tiger Global and Taavet Hinrikus — plus Ashton Kutcher

(Pre-)Seed

SeriesA

SeriesB

SeriesC

SeriesD+

IPO/Exit

London-based company that utilises large amounts of data to uncover concealed hazards regarding financial misconduct, customer insights, credit hazards and deceit

Acquired language processing software startup Aylien in February 2023

(Pre-)Seed

SeriesA

SeriesB

SeriesC

SeriesD+

IPO/Exit

Helps companies personalise their verification processes without the need for code

Last raised funds in April 2020, and has investors such as SoftBank and Eurazeo

Sources

Data sources

Sifted Proprietary data

Dealroom Data

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