Financial security startup Elucidate bags €2.5 million in pre-Series A funding

Berlin, Germany-based regtech startup Elucidate announced in March 2021 that it has raised €2.5 million in a pre-Series A funding round led by Frontline Ventures. Other funding round participants in the funding round include existing investors Seed X Liechtenstein, APEX Ventures, and Big Start Ventures.

The latest round brings the startup’s total funding raised to date to over €5 million.

The startup will use the proceeds from the funding round to expand rating coverage to 100 per cent of the market. It is also planning to increase market penetration to the public sector and regulators and, banks, non-banking financial institutions (NBFIs), VASPs and fintechs already using the platform to measure score and price financial crime risk.

About the startup

Elucidate was founded in 2018. The Elucidate FinCrime Index (EFI) is one of the financial industry’s only regulated financial crime risk benchmarks. The startup caters to a range of renowned financial institutions and public sector entities by taking a quantified method to predict and stop financial crime before it happens. Its platform is built using probabilistic modelling and machine learning and moves the financial crime risk dial from manually proven reactions to a new universal standard for financial crime risk analysis and scoring.

Statements from the investors

Shane Riedel, co-founder and CEO of Elucidate, said the US passed the world’s first anti-money laundering legislation 50 years ago and still they continue to witness scandals transpire with shocking regularity. He also said that the time for status quo optimisation has passed, and they are in a unique position to digitise an outdated infrastructure. He claims that the startup’s in-depth learning dataset is unmatched in the industry, identifying financial crime patterns as they arise. He was quoted to have said, “Just as John Moody revolutionised the way credit risk was understood in 1909, Elucidate’s universal standard is enabling the next wave in financial crime risk management, focused on efficiency and effectiveness, with a benchmark built on standardised risk scoring.”  

Speaking about the funding, Will Prendergast, Partner at Frontline Ventures, said the cost of performing accurate compliance checks today is time-consuming and expensive. Hence the most comfortable option for many financial institutions is not to trade with smaller banks or fintechs. It may seem to remove the problem, but it also has very damaging impacts on financial inclusion, he added. His firm believes Elucidate is the way of addressing this problem and opening up the financial system to those who deserve it, whilst identifying those that do not.

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