Munich-based Hawk AI, a provider of anti-money laundering (AML) and fraud prevention technology for banks and payment companies, announced on Thursday, January 26, that it has raised $17M (approximately €15.6M) in a Series B round of funding.
The company says it will use the funds to accelerate its product development and expand its services globally.
Investors in this round
The investment was led by Sands Capital from Washington DC, with participation from new and existing investors, including DN Capital, Coalition, BlackFin Capital Partners, and Picus Capital.
Chris Eng, Principal at Sands Capital, says, “Financial crime has historically been challenging to identify due to the complexity of financial structures and regulations. Hawk AI’s technology and use of explainable AI present critically needed solutions for institutions across the payments landscape. Hawk AI is creating a more secure financial ecosystem, and we are excited to partner with their team as they continue to expand their platform globally.”
Hawk AI is solving an industry-wide problem
According to Hawk AI, money laundering and fraud are significant economic and societal problems. Currently, more than $2T is laundered yearly, and in 2022, the US suffered fraud losses of more than $41B. In the last 12 months, fraud has surged by more than 37 per cent in high-growth markets.
To safeguard their operations, financial institutions are under constant pressure to strengthen their transaction monitoring, screening, and client due diligence programmes.
The current Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) solutions often falsely flag or block transactions without need. This is where Hawk AI aims to make a difference.
The German company eliminates false alerts by applying fully transparent and auditable Machine Learning to deliver significant process efficiencies. Its software identifies patterns of suspicious activity in financial transactions through AI and provides AML experts with relevant and actionable alerts.
“Ending financial crime”
The company was founded in 2018 by experienced fintech veterans Tobias Schweiger and Wolfgang Berner, who both held senior leadership roles at PAY.ON (sold for $200M) and ACI Worldwide, the global payment systems company.
Hawk AI offers a cloud-based software solution for the automated detection of suspected cases of financial crime. The software helps financial institutions to make their transaction surveillance more efficient and ensure regulatory compliance.
The company claims that its solution drastically reduces false positive rates by over 70 per cent compared to legacy AML/CFT solutions.
Currently, Hawk AI says it processes billions of transactions across 60 countries and works with leading financial institutions and partners such as North American Bancard, Ratepay and Modularbank. Based on the principle of information sharing, the company aims to become the leading compliance platform for transaction surveillance.
Tobias Schweiger says, “My co-founder Wolfgang Berner and I started this business based on the strong belief that only leading-edge, real-time surveillance technology can deliver the change needed to fight financial crime. This contrasts with the obvious, drastic deficiencies in legacy technology.”
“Hawk AI’s growth will continue to be fueled by industry-wide demand for AI, cloud outsourcing, and convergence of Fraud and AML technology. This funding will allow us to reach our ambition to become the leading global surveillance platform faster,” adds Schweiger.
The company says it has witnessed 298 per cent year-over-year revenue growth in 2022 and added Singapore to its global presence spanning Munich, London, New York, San Francisco, and Paris.
Hawk AI operates in more than 60 countries across Europe, North America, Asia, and Latin America. It partners with leading firms including VISA and Diebold Nixdorf, and more than 40 per cent of Hawk AI’s revenue originates from the US.
