Quantexa raises $129m at a $1.8bn valuation to help tackle online fraud and customer data management

Financial fraud and other online crimes continue to present major threats to businesses, and they remain a key focus for regulators requiring more rigorous efforts to keep illicit activity at bay. Now, Quantexa — one of the big startups providing AI and other tools to big banks and others in financial services, governments, and other large organizations to address these challenges — is announcing $129 million in funding. , a round that highlights how services like these are viewed in the marketplace today, and Quantexa’s specific traction within it.

The funding comes in the form of a Series E that values ​​the startup at $1.8 billion. In some context, this is a major step up from its previous cycle almost two years ago (in July 2021), a $153 million Series D which was raised at a valuation of $800-900 million. (It’s also a higher number than some thought: Last week, a report on the Quantexa raise estimated it would be “close to $1.5 billion.”)

Singapore’s sovereign wealth fund GIC – which was also a major investor in Stripe’s recent $6.5 billion round – led that round, along with previous backers Warburg Pincus, Dawn Capital, British Patient Capital, Evolution Equity Partners, HSBC, BNY Mellon, ABN AMRO and AlbionVC.

The last six months have been a tricky time for many startups looking to raise funds, but Quantexa is one of the smaller groups that has bucked this trend.

CEO and founder Vishal Marria said in an interview that the round was oversubscribed and comes at a time when the startup still has “between two and three years of trail” from previous rounds and money generated from its business.

The strong investor interest is partly explained by the company’s performance.

The company’s main products are in the area of ​​risk and compliance, for example tools to help verify user identities, detect money laundering and conduct financial investigations. Along with this, Quantexa uses some of the same techniques to create larger user “graphs” for business intelligence and CRM purposes.

Together they are used by hundreds of customers in some 70 countries, the company said, including major companies such as BNY Mellon, HSBC, Standard Chartered, Danske Bank, Vodafone and the Public Sector Fraud Authority within the Cabinet Office. from the United Kingdom. Marria said Quantexa has doubled its business over the past 18 months: “We’ve doubled the number of users, revenue and the number of industries we target,” he said.

Interestingly, Quantexa’s fundraiser comes on the same day that another KYC startup, Fourthline, also announced a big round of $54 million. His approach is to build everything he uses from scratch. Quantexa takes a different view: it relies but also relies heavily on APIs to work with everything its customers have already integrated into their platforms and operations.

Quantexa will redouble its efforts in this strategy: the plan will be to use the new financing, plus the money the company already had in its coffers, to invest in the construction of new technologies, but also to make acquisitions in order to grow inorganically. Given the number of interesting big data companies and startups that have emerged over the past few years, and how many have struggled to raise funds and scale, there are a number of interesting targets.

Marria noted that a recent acquisition, from Irish startup Aylien, indicates the types of acquisitions Quantexa could make: Aylien’s specialty was natural language processing (NLP) and advanced AI and working with unstructured data, he said.

Notably, Quantexa isn’t profitable yet, but Marria said investors are willing to be patient because the startup has hit so many of its other targets. “It gives the community confidence that our plan is right and that we can implement it.” The company is seeing ARR growth of 140%, and he predicts the company will make $100 million in revenue next year, becoming profitable by 2025.