We’re thrilled to lead Hawk AI’s $10m Series A!
At BlackFin, we deeply believe in the use of AI to detect abnormal patterns and fight against fraud — which is one of the greatest concern for financial institutions at large. That’s why we’ve invested in Friss in Netherlands, which helps insurers to detect fraudulous patterns, and that we’ve invested in Ravelin in the UK — which does the same but in the payment space for e-merchants.
Today, we’re glad to lead Hawk AI’s Series A alongside existing investor Picus Capital and prominent Business Angels, in order to help banks, payment firms and fintechs to fight against financial crime.
Thanks to AI, the Munich-based company created a software platform that identifies patterns of suspicious activity in financial transactions and provides anti-money laundering experts with highly relevant, actionable alerts. The usual problem with Anti Money Laundering (AML) solutions is that they often falsely flag or block transactions without need — an industry-wide problem. To address the challenge, Hawk AI eliminates false alerts, by applying fully transparent and auditable Machine Learning to deliver significant process efficiencies. Such a use of core technology is really how Hawk AI brings disruption to financial institutions, compared to the previous generation of AML software platforms which were mainly rule-based.
In addition to the fact that we really believe in Hawk AI’s technology, what we particularly like about Hawk is their team. The two co-founders, Tobias Schweiger and Wolfgang Berner, have previously exited from PAY.ON, a German fintech bought for $200m by ACI Worldwide, a global payment systems company. From this past experience, they for sure gained a deep knowledge over the market and their clients’ needs. Such a trackrecord is particularly relevant when you address a market with regulatory stakes and trust issues.
Speaking about regulation, it has been drastically increasing pressure on banks but also fintechs to fight financial crime. As of today, financial institutions mostly fail in complying with regulation — despite their massive allocation of resources. To give you a few numbers, $180bn is globally spent on AML solutions, which cover manual investigation and systems to fight against financial crime. But it is pretty ineffective, as $1.6trn are laundered each year, with less than 1% ever found by financial institutions. With increasing regulation, the market Hawk AI tackles — which already represents $39bn in Europe & North America, in terms of tech costs — is going to grow a lot in the coming years.
For all these reasons, we’re proud to stand alongside Hawk AI incredible team and are confident in helping them achieve their mission of reducing financial crime! Next step is strengthening its European and U.S. footprint, while also expanding to Singapore and the United Arab Emirates.