Startup Focused on Non-Fraud Crypto Payments Raises $51M

A platform focused on fighting fraud via instant crypto transactions has raised $51.5 million in venture funding, earmarked to help the startup roll out new products faster.

Founded in 2020, Sardine supports application programming interfaces (APIs) for payments, fraud and compliance, as well as instant settlement of crypto and NFT transactions.

Venture capital firm Andreessen Horowitz’s Growth Fund led the Series B round. Other investors include XYZ, Nyca Partners, Sound Ventures, Activant Capital, Google Ventures, Visa, The General Partnership, NAventures, ING Ventures, ConsenSys, Cross River Digital Ventures, Alloy Labs and Uniswap Labs Ventures.

A spokesperson declined to specify Sardine’s new valuation.

Sardine raised $4.6 million in a seed round in March 2021, marketing itself as an alternative to bank-as-a-service platforms such as Plaid, Synapse and Marqeta. The company said at the time that its fraud detection platform identifies bad actors by combining data around browser fingerprints, mobile device attributes, network traffic, sensor data and user behavior.

The Federal Trade Commission (FTC) said in June that from January 2021 to March 2022, more than 46,000 people reported losing more than $1 billion in crypto to fraud.

“Sardine’s anti-fraud technology helps move money quickly and without risk, and their rapid growth is a testament to the criticality and strength of their offering,” Alex Immerman, a partner at a16z Growth Fund, said in a statement.

ACH (Automated Clearing House) is the primary payment method for paying taxes, employees and suppliers. The ACH network moved 7.5 billion payments in the second quarter of 2022, according to Nacha data.

Sardine’s instant settlement allows an instant ACH and card on-ramp to crypto, allowing customers to purchase approximately 30 crypto assets or NFTs.

The company’s team built fraud prevention and compliance infrastructure for Coinbase, Revolut, Uber, PayPal and Zelle. Alfarida Mohammed, FTX’s senior vice president of compliance, said in a statement that the crypto exchange uses Sardine’s technology to protect its crypto traders.

“Our mission is to enable safer, faster payments in a seamless experience across financial institutions, fintechs and crypto companies – built on our venture platform,” Sardine CEO Soups Ranjan told Blockworks. “A portion of our Series B funding will be used to accelerate the development of our card and instant ACH to crypto on-ramp and NFT Checkout products.”

Before founding Sardine, Ranjan was head of crypto at financial app Revolut. Prior to that, he spent nearly four years as director of data science and risk at Coinbase.

Major financial institutions have in-house versions of fraud, identity or payment devices. Other firms, such as Elliptic, TRM Labs and Mastercard subsidiary CipherTrace, offer solutions in one or more of these realms.

But Andrew Steele, a partner at Activant Capital, said in a statement Sardine is a rare example of a platform that combines fraud, identity and payment solutions.

“Unlocking instant payments across fintech and crypto, they are uniquely positioned to build a leading payments network for the future,” Steele said.

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