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Fraud protection platform Alloy raises $100M to hit unicorn status

Alloy, a New York-based fintech helping financial institutions identify users and monitor transactions, announced Thursday it snagged a $100 million Series C led by Lightspeed Venture Partners.

The company says it will use the funding to expand its product offerings to help fintechs and banks combat fraud, continue scaling its team and enhance its data sources used for KYC and AML compliance.

Existing investors Canapi Ventures, Bessemer Venture Partners, Avid Ventures and Felicis Ventures also participated in the round, which brings the company’s total funding to $150 million and alongside a shiny unicorn status at a $1.35 billion valuation.

Founded in 2015 by Charles Hearn, Laura Spiekerman and Tommy Nicholas as an onboarding automation and identification platform, the company has expanded its services to assist financial institutions in automating transaction monitoring.

“We’ve been pretty onboarding focus for the last four, five years since the beginning. Mostly it’s used to sort of expand the product offerings we have do decisioning for high risk events and transactions. Bringing out the customer profile and this is a byproduct of doing things that are beyond onboarding,” Spiekerman said in an interview with FinLedger.

“Where we’re really now is the end customer profile, whether it’s a person or a business, will live on in this always record. That’s I think one of the areas that we really want to invest in, making that really functional and kind of richer. Having all sorts of data points over time to help our clients do things like ‘what-if’ analysis,” Spiekerman said.

Alloy also now connects clients to its data web, which includes information from over 120 data providers, to provide instant decision systems that help organizations determine risk and protect against fraud and meet regulatory compliance needs.

The company has seen revenue more than double in less than a year, and currently serves clients including Ally Bank, HMBradley, Gemini, Ramp and Evolve Bank & Trust. The organization’s headcount has also increased over 140% in that time.

Additional plans for funding include expanding into credit underwriting assistance and growing its developer experience for early startups. Because financial institutions’ efforts to mitigate risk have resulted in less than ideal user experiences, Alloy is set on removing this barrier all together.

“Our entire mission is to make that go away and have risk be something you can just install and put into the background to solve all the problems of users who can take money from you,” Alloy co-founder and CEO Nicholas told TechCrunch

Alloy’s data comes from a number of sources, including public records, credit databases and other records that can be used to determine identity and credit history

“We have a team dedicated to this, so we have a product manager who goes out and scours the world for the best emerging companies that are doing whatever they’re doing, verification of an ID or synthetic fraud, and learns about them to understand their compliance and their data security,” Spiekerman said.

Looking ahead, Spiekerman says the company wants to continue growing and hitting new revenue goals, but is also interested in becoming a successful multi-product company, with new products being developed as their core business continues forward.

“We just really, really want to see these products succeed and it’s almost like starting startups within a startup. So that’s a lot of what I think we want to achieve this year, we’ve set some company OKRs for example that I think reflects that commitment to the products being successful, rather than to just revenue growth,” she said.

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