US-based fintech start-up Baselayer has emerged from stealth with $6.5 million in seed funding.
The round saw participation from Torch Capital, Afore Capital, Founder Collective, Picus Capital, Gilgamesh Ventures and notable financial industry executives and fintech founders.
The B2B platform uses proprietary artificial intelligence (AI) technology to fight fraud and optimise business onboarding. The start-up claims to have already secured 30 customers within six months, expanding its reach to over 25 million potential business accounts.
Jonathan Awad, CEO and co-founder of Baselayer, told The Digital Banker that the company aims to solve the thin file or no file problem on small businesses that financial institutions, lenders, and payments companies face when digitally interacting with small and medium businesses (SMBs) who want their products or services.
“We automate manual reviews, authenticate government registrations, create risk profiles at the time of onboarding and for ongoing monitoring, and prevent B2B fraud via machine learning (ML) predictions and fraud sharing infrastructure,” Awad said.
The idea for the start-up stemmed from personal experience, when Awad and Baselayer co-founder and chief technology officer (CTO) Timothy Hyde, found themselves unable to secure a business banking account in the wake of multiple bank failures in early 2023.
They quickly identified they were not the only new company experiencing the issue, which left them unable to pay bills or vendors. With no solution besides waiting over a month for the manual review process to unfold, they decided to build one themselves.
“Without a bank account, it’s impossible to run a business, and as fraud has gotten more sophisticated, it’s become even more difficult for banks to verify small or new companies,” Awad explained. “We saw this problem firsthand, so we built our own solution that provides all banks, lenders, and payments companies on our platform access to fraud sharing on
businesses that does not exist anywhere else in the market.”
The co-founders stated that Baselayer can identify, assess and predict the risk of all potential business customers in real-time, while also solving the “critical” problem of data sharing between financial institutions. Additionally, the platform can also predict and differentiate legitimate from fraudulent patterns, enabling financial institutions and government agencies to “swiftly verify the legitimacy and assess the risk of new business customers in seconds”.
Awad said that while Baselayer is currently focused on serving American SMBs this year, with the fresh funding, it intends to double down on its current infrastructure while also accelerating its reach in the market.
