Fraud prevention fintech Sardine raises over $50 million

Fraud prevention and compliance fintech Sardine has raised US$51.5 million in a Series B funding round led by Andreessen Horowitz (a16z) Growth Fund.

Sardine’s real-time fraud prevention products help customers reduce fraud in high-speed money movements such as banking and cards, digital wallets and crypto. The platform leads to fewer false positives, resulting in faster user growth and higher authorization rates, the San Francisco-based company says.

Sardine combines traditional financial data sets – such as bank account history – with identity, behavioral and device intelligence to significantly improve customers’ risk appetite. It also offers KYC, AML, sanctions and transaction monitoring to reduce fraud across various stages of the customer’s account lifecycle. Named one of the fastest growing startups in the US with over 135 different customers, Sardine is actively hiring for roles across engineering, product development, sales and operations.

Fraud is a pressing issue facing fintechs, with research suggesting that payment fraud increased by as much as 70% in 2021. In addition to a16z, Sardine’s latest round includes new and returning investors such as XYZ, Sound Ventures, Activant Capital, Google Ventures and ING Ventures. It has also received investments from former Google CEO Eric Schmidt, and former Citigroup CEO Vikram Pandit.

“Faster payments lead to faster fraud”

“Faster payments mean faster fraud,” says Sardine CEO Soups Ranjan. “As Zelle, RTP and FedNow become increasingly popular, consumers are increasingly vulnerable to social engineering attacks where they are convinced to buy something that will never arrive or invest in a scam. Second, financial institutions only know that their customers bought ETH or USDC, not what they do with it afterwards. What is needed is a new way of looking at fraud prevention, one that thoroughly inspects user behavior at the time of purchase and combines that with what happens to the funds downstream. That’s exactly what we built at Sardine.”

Alex Immerman, partner at a16z Growth Fund, agrees: “We believe Sardine is a key payment infrastructure provider across traditional and decentralized finance, and we are proud to continue to support this team on their next stage of growth. Sardine’s anti-fraud technology helps of moving money quickly and without risk, and their rapid growth is a testament to the criticality and strength of their offering.”

Maaria Bajwa, principal at Sound Ventures, singles out crypto as the biggest single use area where Sardine will be useful: “It’s shocking that crypto grew to over USD 3tn of market cap last year with such a terrible user experience. Solving onboarding is the biggest lock the crypto industry has to continued adoption. It must be simple, reliable and safe for both sellers and consumers. This means making it very easy to move money from fiat to cryptocurrency, and to use that cryptocurrency across applications. Sardine has deep expertise in both fraud and KYC to streamline this entire process.”

Sardine offers an instant ACH and card on-ramp to crypto, enabling its fintech and crypto clients to instantly purchase over 30 different crypto-assets or NFTs. Sardine recently launched a direct fiat-to-NFT cash product, partnering with Autograph for their Tom Brady Signature Experience NFT launch.

“We are excited to offer instant ACH settlement, which was once thought to be impossible because the fraud risk was too high,” said Aditya Goel, co-founder of Sardine. “Not only does Sardine take on 100% of all fraud, compliance and liability associated with instant money movement, but we also offer higher limits than would be available via card payments. We want people to move money safely online, and this product is crucial for payment companies that want to offer a good user experience.”