Blitzscaling Sardine with SweatEquity
Sardine is officially out of stealth! We’ve been celebrating all of the hard work our team has put in to get to where we are now, and we all feel more driven than ever to enable the digital economy to operate at scale without fraud. Our founding story is pretty unique, so I wanted to share how we got started, for the benefit of future entrepreneurs.
TL;DR If you are thinking about starting on your own, the following are the two main lessons we have imbibed. Read further to learn how we lived by these principles in our founding journey:
“Action produces information. Just start somewhere, ship things and iterate inside the idea maze instead of debating where to begin” — Brian Armstrong, Coinbase CEO and co-founder
“I’ve often said that starting a company is like jumping off a cliff and assembling a plane on the way down. Blitzscaling is like assembling that plane faster, then strapping on and igniting a set of jet engines, while still building the wings.” — Reid Hoffman, Greylock Partner
Fincrime prevention
The story begins 15+ years ago, when I first met Dan Portillo, the founder of Sweat Equity Ventures (SEV), when he attempted to recruit me as a co-founder of a Greylock incubated cyber-security company. Dan is one of the most well connected operators in the valley and we’d kept in touch through the years. He has a unique spidey sense for matchmaking entrepreneurs with shared interests, so in 2019, when he introduced me to Anthony Kline (AK), an SEV Partner, my interest was instantly piqued.
AK had built an elaborate thesis around incubating a company in the financial crime prevention space. AK had become interested in all things financial crimes while leading executive recruiting at Stripe. In particular, he was passionate about the severe consequences of money laundering — the profits from which often finance nefarious activities like drug trafficking, human trafficking, and terrorism. But our current financial system only catches single digit percentages of the trillions of dollars that are laundered each year.
After conducting extensive research into the anti-money laundering space and speaking with industry experts, it became clear that there were no tools that could meaningfully fight these kinds of financial crimes. No one was tracking and analyzing how money moves from place to place, who’s touching it, and where it ends up. A good financial crime and fraud prevention product would really make a difference and even save lives by minimizing the capital that goes toward nefarious activities.
AK and SEV were looking for someone who understood what was at stake and could take on this challenge to develop the risk and fraud layer of the fintech stack. AK even had a company name in mind, SARdine — a play on Suspicious Activity Reports (SARs), which financial institutions use to file fraud and money laundering cases.
Fraud and AML — one system to tie them both together
Through my background in data science and financial crime prevention at Coinbase and Revolut, I’d experienced first-hand the debilitating effects fraud and money laundering can have on a business. I’ve seen many financial products fail at launch or get delayed by months due to fraud or financial crimes.
This is something many new fintech companies grossly underestimate or don’t understand. Fraud and money laundering can ruin your business before you’ve had a chance to grow, and trying to fight it without the right tools or knowledge can lead to a dysfunctional product that hinders success. What’s more, the ability to detect fraud, counter bad actors’ evolving tactics, and build effective barriers is more of an art than a science, and it can only be learned the hard way — through operational experience.
Existing anti-fraud solutions were all built for e-commerce platforms, which face different problems and work with different data than today’s digital businesses. Cryptocurrencies and neobanks are on the rise, but the tools that are available to them simply don’t address the right factors, resulting in high false-positives, high decline rates, and overall poor fraud detection.
Furthermore, we realized that the financial services industry was extremely fragmented. I’d seen fintech companies use three separate platforms for compliance, trust and safety, and fraud. This system was inefficient and costly, and prevented critical knowledge sharing that would allow fraud teams to optimize their metrics and expenses. Clearly there should be a better solution.
I saw the value in a company that could provide both fraud and fincrime prevention as a service to the growing fintech market. We came up with the idea for a single API platform that could tackle all of fraud, AML, and user security risks. It only made sense to join forces with SEV as they provided everything I needed to quickly get the company up and running!
Blitzscaling Sardine
We are big believers in the concept of Blitzscaling introduced by Reid Hoffman. We knew we wanted to get to market with the product ASAP while also building out the team and fundraising. This is where our partnership with SEV proved to be phenomenal, ultimately in cutting our time to launch in half.
I brought on Aditya and Zahid, my former colleagues from Revolut, as co-founders given their amazing fraud-fighting backgrounds and our great camaraderie as a team. Aditya led Revolut’s launch in the US and built the neobank and underlying payments infrastructure from the ground up. He had got his hands dirty fighting sophisticated fraudsters, many of whom had even signed up for Revolut’s US waiting list, several years in advance, showing that fraudsters of today are highly patient. Zahid built device intelligence and merchant fraud protection for PayPal, and fought ghostriding at Uber and is one of the foremost thought leaders in the fraud prevention space.
With SEV’s help, we identified our lead investor — Ross Fubini at XYZ Ventures — and immediately kicked things into overdrive. Andrei Savu, one of SEV’s principal engineers, led our initial platform build-out and acted as our interim CTO; he’s one of the most well-rounded full-stack builders I’ve ever seen and he had our prototype ready within a few months!
In parallel, AK and Shelly Lipson helped us recruit our core engineering team, starting with Kazuki as our engineering lead. We were really impressed with Kazuki’s drive and humility, and he elevated our team’s core expertise with his deep background in fighting e-commerce fraud at Bolt and Google Pay.
Building a company requires constant iterations on getting the right narrative and positioning, and we were extremely fortunate in having Alexis Rask’s coaching and mentorship throughout this process, along with go-to-market advice from several C-level sales executives from Fortune 500 companies.
In true blitzscaling fashion, before we could hire our full team of data scientists and designers, we began building our AI fraud models and transaction monitoring system before even hiring a full team of data scientists and designers. With support from an elite group of former Google and Coinbase data scientists and engineers as consultants, we had a solid foundation in place by the time we brought on board Srikant Rao, Sri Harsha, and Divakar — our founding machine learning and backend engineers who then took our blitzscaled plane and made it fly!
This blitzscaling approach helped us launch 2x faster than we’d anticipated, and now that we are out of stealth we are able to share how our first set of customers are using us!
Sardine: The identity and fraud operating system
Today, Sardine is the first identity and fraud operating system for digital businesses. We offer “fraud and fincrime prevention as a service” (FaaS) powered by AI and designed from the ground up to address the needs of the financial systems that will populate the future. Fintech startups, crypto companies, neobanks, etc. can quickly and easily incorporate Sardine into their tech stacks and let our platform handle the fraudsters that come along.
Come join us!
We are still only getting started. If you are a FinTech or a crypto company looking for fraud or fincrime prevention, please don’t hesitate to reach out. We are also hiring for multiple roles across data science, engineering, and sales!
