Anti-money laundering regtech startup First AML has raised A$28.7 million (NZ$30m) in a series B.
The round was led by Blackbird Ventures, with support from new investors Headline Ventures, and existing backers Pushpay founder Eliot Crowther, US firm Bedrock Capital and Kiwi VC Icehouse Ventures.
Blackbird partner Samantha Wong will join the board.
The funds will be used to double the team from 90 to 180 employees globally by the end of 2022, as well as global expansion into Europe.
First AML previously raised A$7.3 million in a series A in September last year. Six months ago, the anti-money laundering (AML) startup launched in Australia to help companies tackle the federal government’s growing AML and counter-terrorism financing (CTF) compliance requirements.
The regtech’s platform streamlines AML compliance for the likes of financial service providers and other professional services. The company’s end-to-end customer due diligence platform automates the identity verification of customers, giving companies complete visibility and management oversight of the process, minimising money laundering risk.
The platform also includes improved biometric identification for remote verification and new visual tools to help users understand the ownership of complex company structures.
A second tranche of AML legislation is expected to be introduced in Australia in 2023. Under Tranche 1, there are 15,000 reporting entities and that figure is expected to grow to 100,000 under Tranche 2 with AML compliance mandatory for lawyers, accountants and real estate agents.
CEO Milan Cooper founded First AML in 2017 with Bion Behdin and Chris Caigou, who were working as corporate bankers when the first phase of AML regulations were introduced for banks in 2013.
Since the company in Australia earlier this year, it’s built a team of 15 in Sydney to complement the Auckland HQ, and is looking to another eight before the year’s end.
Cooper said the market for AML solutions has grown nearly 20% in the past year to US$214 billion, offering his startup a massive global market opportunity.
“First AML’s customers love our solution and it’s proving to be the best approach to streamlining customer due diligence,” he said.
“With groundbreaking investigations around tax havens and money laundering across multiple countries, the AML compliance regime is now shifting to non-financial businesses globally. This raise will help us scale, fuelling further global expansion and product development to supercharge our network effect.”
Cooper said First AML’s network effect means that as the number of customers grows, more data is included in the central repository. If that verification already exists, it can be retrieved immediately with the client’s consent so AML verification is instantaneous. That already accounts for 25% of all checks.
“This ‘AML verified’ parcel of information means companies, trusts and individuals undertaking repeated AML checks is a thing of the past,” he said.
Blackbird Ventures has been an First AML customer for several years, along with several local VCs, and Samantha Wong said her firm heavily relies on the platform.
“That is partly what is special about this deal – how intimately connected we are to the customer pain point, our love for the product roadmap, and the network effect beginning to emerge in the product and business model,” she said.