Salv, the anti-money laundering startup founded by ex-TransferWise employees, picks up $2M seed

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Salv, an anti-money laundering (AML) startup founded by former TransferWise and Skype workers, has raised $2 million in seed funding.

The spherical is led by Fly Ventures, alongside Passion Capital and Seedcamp. Angel traders additionally collaborating embrace N26 founder Maximilian Tayenthal (who appears to be doing fairly a little bit of angel investing), Twilio CTO Ott Kaukver, and Taavi Kotka, former CIO for Estonia (the precise nation!).

Founded in June 2018 and initially providing consultancy, Estonia-based Salv has constructed a software program platform that helps banks discover and cease monetary crime. The concept, says co-founder and CEO Taavi Tamkivi, is to maneuver AML past simply compliance to one thing extra proactive that truly does defeat crime. That’s fairly the promise, though he and his co-founders have lots expertise to attract from, each inside fast-growing startups and AML.

Tamkivi constructed the AML, fraud, and Know Your Customer (KYC) groups at TransferWise and Skype. COO Scott McClelland additionally labored in the anti-fraud staff at Skype, adopted by a stint at TransferWise, first as an analyst after which in HR. And CTO Sergei Rumjantsev was additionally previously at TransferWise, main the engineering staff liable for KYC and verification.

“This was a highly demanding role, especially given how fast TransferWise was growing, how many new markets were coming online, and how central user verification is for compliance,” Tamkivi tells me. “Under Sergei’s leadership, the team made the verification process incredibly smooth over time for genuine customers. But also robust enough to protect TransferWise from on-boarding bad actors”.

Bad actors inside monetary companies are aplenty, after all. Yet, regardless of the European banking sector spending billions tackling the drawback, it’s estimated that solely 1-2% of worldwide money-laundering is detected.

“AML should be all about stopping money laundering but, particularly in the last decade, layer upon layer of regulations have been added for banks to comply with,” says Tamkivi. “This would be great if that meant that there was no more money laundering, but sadly, that’s a long way off. Today, between $1-2 trillion a year is still laundered. But the excessive regulations mean that nearly all of a bank’s compliance team’s effort goes into compliance. They have very little energy left to actually focus on improving their financial crime-fighting abilities. The software they’re using is similar, focused almost wholly on compliance, not crime-fighting”.

That is the place Salv desires to step in, and Tamkivi says the foremost distinction between the startup’s AML software program and different present options is a a lot larger emphasis on crime-fighting somewhat than a box-ticking compliance train.

“We’re aiming to create a transformation similar to what’s happened in virus scanning,” he says. “10-15 years ago virus scanners on everyone’s PCs were an enormous hassle, consumed tons of resources and stopped you from getting work done. The same is true in financial institutions today. They’re using outdated, heavy software and processes to handle AML. But today, virus scanning still happens, but nobody’s worried about it. It happens in the background, with few resources. We’ll do the same in the AML world”.

In addition, the Salv CEO claims that the firm’s software program is quicker than rivals’ choices, each when it comes to set up time and integration, and making modifications to the guidelines the system adheres to.

“Our system, by contrast, takes a month or less to set up and minutes to modify the rules,” he says. “As a result, our customers can take everything they learn today from new criminal patterns, encode it in automated rules tomorrow, and repeat that cycle every day to protect their bank. Moving fast is the only way to keep up with the innovative organised criminals moving millions or billions around the world”.

To that finish, Salv already counts Estonian financial institution LHV as its first buyer. “They offer a full suite of banking products across Estonia,” says Tamkivi. “They’re also active in London, in particular, supporting fintechs. We have another couple of customers in the Lithuanian fintech scene. One of those is DeVere e-Money”.

More usually, Salv’s product is claimed to be appropriate for Tier 2 and Tier three banks, in addition to regulated fintechs and challenger banks.

Meanwhile, the enterprise mannequin is simple sufficient. Salv costs a month-to-month subscription, whereas the worth varies primarily based on the variety of energetic prospects a financial institution or fintech has.