AI-native AML compliance platform Flagright today announces a $4.3M seed round to further develop Flagright solutions and fund international expansion. The raise was led by Frontline Ventures, with contributions from a series of notable angel investors. 

AI-powered financial crime can take many shapes. In one particular case, an employee at a Hong Kong-based institution was tricked into sending a fraudster some $25M, after a video call with what seemed to be their colleagues and CFO. Some experts estimate that today, around half of all bank scams involve AI in one shape or another. One report suggests that in 2023, deepfake instances in fintech increased by 700%. 

Fortunately, one team is harnessing AI to counter hackers with compliance methods just as innovative, and evolving just as quickly, as those used by fraudsters. 

Baran Ozkan and Madhu Nadig co-founded Flagright in 2022 after the pair realised that no existing financial compliance teams were successfully delivering on promises made about speed, efficiency and quality of service. Given their findings, the duo decided they wanted to build something they would want to buy themselves.

Initially, Flagright focused on real-time transaction monitoring before the emergence of AI and LLMs changed the game—triggering the team to grow into a full-suite AML compliance platform. Fast forward to today, Flagright boasts over 50 customers across six continents, with a team of 35 employees.

Co-founder Baran Ozkan says: “We were really early-stage when the boom in AI came into effect, meaning we could implement AI-native solutions from the very start, something that more established companies running on legacy architecture have found challenging. It is true that bad actors in financial crime are finding new ways of using AI all the time, which is what makes the work Flagright is doing so important. This funding will allow us to further develop our AI agents that will allow financial companies to stay one step ahead.”

Today, Flagright provides a state-of-the-art AI-native compliance operating system, including dynamic risk scoring, automated case management, real-time transaction monitoring, and AML screening. With 99.99% uptime and real-time data processing, Flagright’s banking-grade reliability is unmatched. Customers report 90% fewer false positives, 87% less manual monitoring effort, and a drastic improvement in overall compliance operations performance — demonstrating a measurable impact on operational efficiency.

Tom Jennings, CEO at Flagright customer B4B Payments, says: “By integrating Flagright’s AI-native compliance platform, we have enhanced our fraud detection and AML monitoring capabilities. This allows us to proactively identify and mitigate risks, ensuring a safe and secure environment for our customers while upholding the highest standards of compliance.”

To accelerate its vision, Flagright has raised a $4.3 million seed round led by Frontline Ventures, with participation from notable angel investors such as Rubin Ritter (Ex-Co-CEO of Zalando), André Silva (Ex-Global Head of Expansion at Revolut), Phillip Chambers (CEO of Orbex), Ahmed Badr (COO of GoCardless), Teng Sherng Lim (Ex-CCO of Advance.AI), and Saqib Mirza (CEO of Sciopay). Existing investors, including Y Combinator, Pioneer Fund, and Moonfire Ventures, also doubled down in this round.

Will Prendergast, Partner at Frontline Ventures, says: “At Frontline Ventures, we invest in companies that are emerging winners in their category and on an IPO path. During our research with financial institutions before Frontline’s initial investment in Flagright, we kept hearing how Flagright had outperformed other companies—we believe they will be the compliance platform category winner, making them a perfect fit for Frontline.”

Flagright has already developed AI Forensics for Screening, an AI agent that reduces false positives by up to 93%, cuts operational costs by 80%, and lowers human errors by 27%. With this newly announced funding, Flagright is expanding AI Forensics into an entire product family that automates compliance workflows for screening, monitoring, governance, and quality assurance.

Beyond product innovation, Flagright is expanding globally to meet growing demand. The company is doubling down on its North American presence in New York and San Francisco, strengthening relationships with financial institutions in the region. Additionally, Flagright has recently established an EMEA headquarters in London, complementing its footprint in Berlin, Singapore, and Bangalore.