Sardine raises $51.5M led by a16z to sniff out fishy fintech transactions
Summary
Thats the thesis behind his startup, which uses behavioral, financial and device-specific user data to detect fraud on behalf of its clients in the crypto and fintech industries.Those conditions also mean a faster fundraising process for Sardine, evidently. Its customers include crypto exchanges FTX and Blockchain.com as well as fintechs with broader mandates such as Wealthsimple and Digit, he added.After participating as one of 10 startups in the FIS Fintech Accelerator program this summer, the startup is making a push into core banking processes and is in discussions with large banks in the U.S. and Europe, Ranjan said.Its easier to understand why a fintech or crypto startup might want to beef up its fraud prevention capabilities, but Ranjan explained that even for big banks, the standard KYC (Know Your Customer) compliance process isnt equivalent to a fraud protection program; 90% of fraud detected on Sardines customers platforms comes from individuals who have already passed the KYC process, he said.Sardine does have competition from other startups in the identity-verification space, such as Socure, which told TechCrunch last year that it counts three of the top five global banks as customers. Ranjan himself previously worked as Coinbases director of data science and risk and Revoluts head of crypto, and the companys head of banking partnerships came to the startup from Zelle.If you actually peek underneath the hood at any of these traditional fraud prevention vendors, you will find that the APIs dont even have support for the identity of an individual, because theyre all built or designed for the e-commerce checkout experience, Ranjan said. Rather than analyzing a customers shipping address and shopping cart, Sardine looks at device intelligence and behavioral biometric data that helps identify whether an individual engaging in a transaction is really who they say they are, he continued.Another major differentiator for Sardine from competitors like Socure is its instant ACH and card onramp to crypto, which allows its customers to purchase over 30 different crypto assets instantly rather than having to wait the traditional few days to access their funds. He declined to share details around the chargeback rates Sardine sees across its older products, but said that the platform allows customers to access some, but not all, of their crypto instantly.Sardine is taking on the fraud risk.
Funding
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