Blackbird Ventures has led a $NZ30 million ($28.7 million) Series B funding round in Auckland-based anti-money laundering technology company First AML.
First AML’s technology is used by financial service providers, law firms, real estate agents and accountants.
Blackbird was an early investor in First AML and has used its technology for several years.
The raise was supported by new investor, San Francisco-based venture firm Headline and existing investors, Pushpay founder Eliot Crowther, US venture firm Bedrock Capital and Auckland venture firm Icehouse Ventures.
First AML entered the Australian market earlier this year and has already hired more than 15 local staff. The company expects to hire another eight staff in Australia before the end of the year.
Over recent months, AUSTRAC has launched investigations into large Australian businesses alleged to have failed to prevent money laundering despite spending millions of dollars on internal processes.
First AML says it solves the problem of complying with know your customer (KYC) regulations by digitising the customer onboarding process and ensuring that all reporting entities meet compliance requirements. The company’s end-to-end customer due diligence platform automates customer identity verification while providing clients with visibility and management oversight of the process. The platform also includes improved biometric identification for remote verification and new visual tools to help users understand the ownership of complex corporate structures.
Blackbird’s Auckland-based partner Samantha Wong said: “Blackbird heavily relies on First AML. 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.”
Wong, who was a corporate lawyer before joining Blackbird, is to join the First AML board.
First AML plans to use the new funding to double its total team from 90 to around 180 employees before the end of next year and to expand into Europe.
First AML chief executive and co-founder Milan Cooper said the company’s software was proving to be the best approach to streamlining customer due diligence.
He said the global market for anti-money laundering technology had grown nearly 20% in the last year to $US214 billion creating a massive opportunity for the company.
“With groundbreaking investigations around tax havens and money laundering across multiple countries, the anti-money laundering compliance regime is now shifting to non-financial businesses, globally,” Cooper said. “This raise will help us scale, fueling further global expansion and product development to supercharge our network effect.”
The “network effect”, he said was the process by which, as the number of First AML customers grew, the more data was included in its central depository.
If a verification already exists withing the repository, it can be retrieved immediately, with the client’s consent, meaning that anti-money laundering verification is instantaneous. This currently accounts for 25% of all checks.
This “AML verified” data means many companies, trusts and individuals no longer have to go through repeated anti-money laundering identification checks.
First AML was founded in 2017 by Cooper, Bion Behdin and Chris Caigou who were working as corporate bankers when banks came under the first phase of anti-money laundering regulations in 2013.
Bedrock Capital led First AML’s $7.3 million Series A funding round last year. That round was also supported by existing investors.
Image: First AML founders Milan Cooper, Bion Behdin and Chris Caigou.