Alloy, a bank and fintech identity operating System Company, stated on Thursday that it has received $100 million at a $1.35 billion value.
The Series C round was headed by Lightspeed Venture Partners and it comes just over a year after New York-based Alloy received $40 million in a Series B round. Canapi Ventures, Bessemer Venture Partners, Avid Ventures, and Felicis Ventures also contributed to the current round, increasing Alloy’s total funding to nearly $150 million since its start in 2015.
Alloy was founded to remedy a “broken” onboarding process that requires manual scrutiny when customers applied for bank accounts online in the past. Simply put, the startup’s initial objective was to use its single API service and SaaS platform to enable banks and fintech to make better identity and risk decisions.
Alloy’s technology has evolved over the previous year to automate not only onboarding identity choices, but also transaction tracking and, soon, credit underwriting. According to Alloy CFO Kiran Hebbar, the company’s annual recurring revenue (ARR) has tripled and the number of clients has doubled in the last year.
Ally Bank, HMBradley, Brex, Marqeta, Gemini, Ramp, and Evolve Bank & Trust is among the company’s more than 200 clients, up from 90 at this time last year.
Alloy connects its users to data from 120 identity sources, which it then utilizes to assist financial institutions in preventing fraud during new customer onboarding and ongoing transactions. “Is this a real person?” is one of the questions it hopes to address for banks and fintechs. Will they take advantage of us?”
And it does so by allowing businesses to construct real-time decisioning systems that are tailored to their regulatory compliance and risk management requirements. “It’s incredibly difficult for fintech businesses and banks to launch products that are both secure for them, meaning they won’t take on a lot of fraud or compliance losses, and smooth for their users,” said Tommy Nicholas, CEO, and co-founder.
In the past, financial institution’s efforts to reduce risk have resulted in less-than-ideal user experiences.
Nicholas told TechCrunch, “Our entire objective is to make that go away and have risk be something you can just install and put into the background to handle all of the difficulties of users who potentially take money from you.” “And we’ve grown really excellent at automating and optimizing those processes for them.” We’re simply encouraging people to gather their most significant procedures and consolidate them into a single system.”