Quantexa, one of the startups that has been building AI-based solutions to help detect and stop money laundering, fraud and other illicit activity, has raised a growth round of $153 million to continue expanding that business in financial services and to bring its tools into a wider context — linking up the dots around all customer and other data.
“We’ve diversified outside of financial services and working with government, healthcare, elcos and insurance,” said Vishal Marria, its founder and CEO. “That has been substantial. Given the whole journey that the market’s gone through in contextual decision intelligence as part of bigger digital transformation, it was inevitable.”
The Series D values the London-based startup between $800 million and $900 million on the heels of Quantexa growing its subscriptions revenues by 108 per cent in the last year.
Warburg Pincus led the round, with existing backers Dawn Capital, AlbionVC, Evolution Equity Partners (a specialist cybersecurity VC), HSBC, ABN AMRO Ventures and British Patient Capital also participating. The valuation is a significant hike up for Quantexa, which was valued between $200 million and $300 million in its Series C last July. It has now raised over $240 million to date.
As a director at Ernst & Young responsible for helping its clients combat money laundering and other forms of fraud, Marria spotted a gap in the market that prompted the launch of Quantexa. In his view, there are no real systems available in the market that can tap the world of data available to companies — matching up and parsing both their internal information and external, publicly available data — to get more meaningful insights into potential fraud, money laundering and other illegal activities quickly and accurately.
Quantexa’s machine learning system approaches that challenge as a classic big data problem — too much data for a human to parse on their own, but small work for AI algorithms processing huge amounts of that data for specific ends.
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Its so-called “Contextual Decision Intelligence” models were built initially specifically to address this for financial services, with AI tools for assessing risk and compliance and identifying financial criminal activity, leveraging relationships that Quantexa has with partners like Accenture, Deloitte, Microsoft and Google to help fill in more data gaps.
In a single engagement, the company says its software, not the data, has handled up to 60 billion records. As a result, insights are presented in the form of easily digestible graphs and other formats so that users can better understand the relationships between different entities, for instance.
Today, financial services companies still make up about 60 per cent of the company’s business, Marria said, with seven of the top 10 UK and Australian banks and six of the top 14 financial institutions in North America among its customers. The list includes its strategic backer HSBC, as well as Standard Chartered Bank and Danske Bank.
