Financial crime fighting startup ComplyAdvantage raises $50m

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
·3-min read
ComplyAdvantage chief executive and founder Charlie Delingpole. Photo: ComplyAdvantage
ComplyAdvantage chief executive and founder Charlie Delingpole. Photo: ComplyAdvantage

A startup that helps companies make sure they are not dealing with terrorists, corrupt politicians or drug dealers has raised $50m (£38.8m) to fund expansion.

London-based ComplyAdvantage said on Tuesday it had raised the new funding from the Ontario Teachers’ Pension Plan Board, one of the world’s largest pension plans. Existing venture capital investors investors Index Ventures and Balderton Capital also invested.

ComplyAdvantage helps banks and other financial institutions monitor business to ensure they are not facilitating financial crime.

The startup has built a proprietary database of people on sanctions lists, watchlists, and politically exposed individuals that it uses to cross-check against bank’s transactions.

“We’re dealing with not only sanctions, but also corruption, political exposure, human trafficking, wild life trafficking — the whole global instability thing definitely plays into our wheelhouse in terms of how you prevent that,” founder and chief executive Charlie Delingpole told Yahoo Finance UK.

ComplyAdvantage uses machine learning and artificial intelligence (AI) to scan headlines around the world to keep its database up to date and perform checks.

“We can look at, say, an article in Spanish or Dutch and say: ‘Lionel Messi terrorised the defence’ is fine, ‘Lionel Messi terrorised attacker’ is not fine,” Delingpole said, adding that the startup “ingests” 10 million new data points each day.

Founded in 2014, ComplyAdvantage works directly with 500 companies and reaches many more through re-sellers or integrations into other products. Clients include banks like Santander and OakNorth as well as insurers, fintechs, law firms, and accountants.

“Companies in this kind of environment can’t afford to sully their reputation not only with consumers but also in terms of the government being much more hands on with companies that facilitate crime,” Delingpole said.

Financial crime has moved up the international agenda in recent years after a £200bn money laundering scandal was uncovered in the Eastern European branches of Denmark’s Danske Banke in 2017. The scandal is thought to be the biggest money laundering ring ever uncovered.

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More recently, Deutsche Bank (DBK.DE) reached a $150m settlement with US prosecutors over anti-money laundering failings and the UK’s Russia Report highlighted the role of the so-called “London laundromat” in laundering Russian cash and reputations internationally.

“People want to solve the problem but they can’t,” Delingpole said. “It’s an industrial problem.

“People can move all over the world and so therefore a small regional bank could be confronted by say someone from Venezuela who stole money or they could be confronted by a hacker from Eastern Europe.

“Local institutions are now confronted by global crimes. As that intensifies more and more, they need better tools in their arsenal to fight that way.”

Jan Hammer, a partner at Index Ventures and ComplyAdvantage board member, said in a statement: “Detecting financial crime in billions of transactions that take place around the globe has become nearly impossible without the application of data science and machine learning.”

Hammer said ComplyAdvantage’s technology had made it the “go-to partner” in the industry.

Delingpole said the $50m raised will be used to expand ComplyAdvantage’s data sources and language range, as well as improve technology. The company is currently investing between £20m and £30m each year in improving its product, he said. The ‘Series C’ funding takes the total raised by ComplyAdvantage to $88m.

Research by Innovate Finance, the lobbying group for the UK’s fintech sector, said this week that UK financial technology startup raised $1.8bn in the first six months of 2020, compared to $3bn during the same period of 2019.

ComplyAdvantage began fundraising in April. Delingpole said the process was relatively unaffected by the COVID-19 pandemic.

“Versus everyone else, we had a really good pandemic and so therefore we were able to raise a good amount of money at a good valuation,” Delingpole said, declining to share specifics on the valuation.