Financial fraud and other online crime continue to pose significant threats to businesses and remain a key focus for regulators, which require tougher efforts to keep illegal activity at bay. Today, London-based Quantexa is one of the leading start-ups to tackle these challenges by providing AI and other tools to large banks and other financial services, governments and other leading organizations. Announced $29 million in funding. These are seen in the market today, in which he has a particular traction for Quantexa.
The funding will come in the form of a Series E, valuing the startup at $1.8 billion. Given the circumstances, this is a big step up from the last round almost two years ago (July 2021). $153 million Series D It was raised at an $800-900 million valuation. (This is also a higher number than expected for this round, which was estimated at “nearly $1.5 billion” in a Quantexa funding report last week.)
Singapore sovereign wealth fund GIC, which was also the lead investor in Stripe’s recent $6.5 billion round, led the round with participation from previous backers. Warburg Pincus, Dawn Capital, British Patient Capital, Evolution Equity Partners, HSBC, BNY Mellon, ABN AMRO, AlbionVC. Prior to this round, Quantexa had raised $240 million.
The past six months have been a very tricky time for many startups looking to raise money, but Quantexa is one of a small group that bucked the trend.
CEO and founder Vishal Marria said in an interview that the round has been flooded with applications, at a time when the startup still has “a two- to three-year runway” from previous rounds and cash from the business. said he would come.
One of the reasons for the strong interest of investors is the company’s performance.
The company’s core products are in the area of risk and compliance, for example tools for verifying user identities, detecting money laundering and performing financial investigations. In addition, Quantexa is using some of the same techniques to build a larger user “graph” for business intelligence and CRM purposes.
They are used by hundreds of customers in nearly 70 countries, including major corporate organizations such as BNY Mellon, HSBC, Standard Chartered, Danske Bank, Vodafone and the Public Sector Fraud Office within the UK Cabinet Office. said Quantexa has doubled its business in the last 18 months.
Interestingly, Quantexa’s funding came on the same day that another KYC startup, Fourthline, also announced a big $54 million round. Fourthline’s past (and future) approach has been to build everything it uses from scratch. Quantexa sees it differently. It doesn’t just build, it relies heavily on APIs to work with what customers may already have integrated into their platform and operations.
What the two have in common is a basic idea of how AI tools can be used to address fraud, identity management, and compliance issues. The techniques used by bad actors are sophisticated and too numerous to be tracked by humans alone, requiring the use of machine learning. , natural language, computer vision, and other AI technologies can be built to assist in that task.
Quantexa’s plan is to double down on that strategy. The plan is to use the new money and the money the company already had in its coffers to invest in building new technology as well as make acquisitions and grow inorganically. Given the number of interesting enterprise and big data start-ups that have emerged over the last few years, and how many have proven difficult to fund and scale, there are some interesting targets.
Marria said the recent acquisition of Irish start-up Aylien shows the kind of acquisition Quantexa could make. Aylien’s areas of expertise were natural language processing (NLP) and advanced AI, and manipulation of unstructured data.
Quantexa in particular has yet to turn a profit, but Marria said investors are waiting patiently as the startup has achieved many other goals. “This gives the community confidence that our plans are accurate and that we can deliver on them.” The company is growing ARR by 140% (108% in Series D subscription revenue) , the company expects to generate $100 million in revenue next year and be profitable by 2025.
