Elucidate raises $8 million to help banks counter surging financial crime

Elucidate, a financial crime risk management platform, has raised $8 million in a funding round led by AV8 Ventures, alongside Elevator Ventures, the corporate venture capital entity of Raiffeisen Bank International (RBI) and Tommy Nicholas, Founder and CEO of Alloy. Existing investors APEX Ventures, Frontline Ventures, BiG Start Ventures and SixThirty Ventures, also participated.

The funding comes at a critical time for the financial sector. Overall financial crime has skyrocketed during the COVID pandemic. Geopolitical instability in Eastern Europe and the introduction of sanctions targeting Russia have highlighted the broader challenge financial institutions face when trying to identify and assess financial crime. Fraud and money laundering activities remain largely unmitigated and on the rise, with organizations relying on manual and outdated processes to counter financial crime.

The FCA employs approximately 4,000 people and regulates over 50,000 institutions. To ensure financial crime can be countered through government regulations, including shell company structuring and economic sanctions, a new approach is warranted.

Over the coming months, Elucidate will be engaging with key public authorities in the UK, highlighting the challenges of countering financial crime through existing processes and seeking to work with these authorities, including the FCA to implement advanced, risk-based solutions for financial institution.”

Shane Riedel, co-founder and CEO of Elucidate, said the investment comes at an integral moment for the company as it prepares to scale-up activities. “The Ukraine-Russia conflict and the complexity banks have faced implementing the most recent sanctions has, once again, revealed the sheer scale of financial crime risk banks can find themselves exposed to when they lack the proper tools.

A global reset in how we manage financial crime is needed. Elucidate, with our vision to rid the Earth of financial crime, is leading this trend by demonstrating how technology can be leveraged to set a global benchmark for financial crime risk management.”

Riedel continued, “This funding validates the vital work we are doing, strengthens our position in the market and shows that especially in this current era of geopolitical instability, the financial community is calling for innovative tech solutions to overcome systemic challenges.”

By employing data analysis and modeling, Elucidate has created the world’s first regulated risk scoring system for financial crime, the Elucidate FinCrime Index (EFI), to address this very problem and simplify the way the global financial system manages financial crime.

Elucidate gives financial institutions the ability to identify and measure financial crime risk through sophisticated automation. Since being founded in 2018, Elucidate has rated over 20,000 organizations, setting a regulated benchmark to help the financial sector effectively counter surging financial crime.

The scaling fintech has already received backing from a growing number of renowned financial institutions and individuals who recognize the need for setting a global crime risk benchmark. These partners include investors Raiffeisen Bank International and Lisbon-based Banco de Investimento Global.

Elucidate will use the investment to consolidate its position as the leading financial crime risk management platform, grow its revenue, operations, and data-science teams in Europe and the U,S and expand its recently launched financial crime risk pricing product.

The current funding is the latest in a series of recent company milestones. In November 2021, Elucidate expanded into the US with the opening of an office in Miami. David Lewis, former Executive Secretary of the Financial Action Task Force, also joined Elucidate’s advisory board in February 2022. To date the company has raised $14m in funding and its team has grown to more than 40 people.

Baris Aksoy, General Partner of AV8 Ventures, lead investor, commented, “In a context of uncertainty and constant change, it has become nearly impossible for financial institutions to handle their increasingly complex processes in a manual way. Technology is playing a huge role in transforming this growing challenge. Elucidate’s comprehensive AI-powered data analytics engine helps bring real-time, deep visibility into financial risk exposure, and give control to the people in charge. We are thrilled to be supporting the team’s ambitious vision.”

Valerie Brunner, Group Head of Institutional Clients at RBI, spoke on the investment and how it reflects RBI’s broader support of Elucidate’s work. “Elucidate enriches our internal analyses with additional external data-based assessments. This raises the discussion with our clients to a new qualitatively and quantitatively improved level and makes our compliance framework even more robust.”

For more information go to https://elucidate.co/