Press Releases

Elucidate raises €2.5m financing round to build the Moody’s of financial crime risk

Elucidate’s regulated benchmark enables industry leading financial institutions and regulators to score, manage and price FinCrime risk.
  • Elucidate’s regulated benchmark enables industry leading financial institutions and regulators to score, manage and price FinCrime risk.
  • Round led by Frontline Ventures, joined by Seed X Liechtenstein, APEX Ventures, and Big Start Ventures.
  • Elucidate Clients have benefited from reduced friction and costs by migrating from manual, subjective processes to Elucidate’s universal standard for financial crime risk.

Berlin, Germany, 09 March 2021 — Elucidate, the financial crime risk scoring platform, today announced that it has raised €2.5 million in a pre-Series-A funding round led by Frontline Ventures. Existing investors Seed X Liechtenstein, APEX Ventures, and Big Start Ventures also participated in the round. Elucidate has raised over €5 million in eight months following an earlier funding round in July 2020.

Founded in 2018, Elucidate’s FinCrime Index (EFI) is the industry's only regulated financial crime risk benchmark. It serves a range of industry leading financial institutions and public sector entities by taking a quantified approach to predict and prevent financial crime before it happens. Built using probabilistic modelling and machine learning, it moves the financial crime risk dial from manually determined reactions to a new universal standard for financial crime risk analysis and scoring.

Preventing financial crime requires utilisation of all available data, yet most financial institutions and regulators are currently under-utilising the data available to them.  Where data is analysed, it is often done manually and without the benefit of industry comparison, leading to incomplete conclusions.  No universal standard or benchmark has previously existed, and thus financial institutions have been left to create individual, varied approaches.  

Shane Riedel, Co-founder and CEO of Elucidate said: “The US passed the world’s first anti-money laundering legislation 50 years ago and we continue to see scandals emerge with shocking regularity.  The time for status quo optimisation has passed and we are in a unique position to digitise an antiquated infrastructure. Our deep learning dataset is unparalleled in the industry, identifying financial crime patterns as they emerge. Just as John Moody revolutionised the way credit risk was understood in 1909, Elucidate’s universal standard is enabling the next wave in financial crime risk management, focused on efficiency and effectiveness, with a benchmark built on standardised risk scoring.”  

Crimes such as money laundering, terrorist financing, sanctions, cybercrime, fraud, corruption and tax evasion continue to rise, estimated by the IMF to represent 2-5% of global GDP. Financial institutions are spending, on average, around 3% of revenue to manage the risk with limited returns.  This means that one of the most expensive line items is also its least effective.  It also means criminals are currently able to abuse the financial sector with limited fear of detection, and virtually no fear of prosecution.

Facing these realities, Elucidate has rapidly expanded and currently powers over 2,700 financial institutions’ risk scores, for users across five continents. The speed of uptake is indicative of the appetite for an alternative and enhanced approach to financial crime risk.

Speaking on the announcement Will Prendergast, Partner at Frontline Ventures said: “The cost of performing proper compliance checks today is so time intensive and costly that the easiest option for many financial institutions is not to trade with smaller banks or fintechs.  That may seem to remove the problem but it also has very detrimental impacts on financial inclusion.  We see Elucidate as the way of addressing this problem and opening up the financial system to those who deserve it, whilst identifying those that do not.”

The investment follows a seed financing round in July 2020. Elucidate will use the additional capital to expand rating coverage to 100% of the market.  Additionally, Elucidate will accelerate market penetration to the public sector and regulators, in addition to banks, non-banking financial institutions (NBFIs), VASPs and fintechs already using the platform to assess, score and price financial crime risk.

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About Elucidate: Elucidate (https://www.elucidate.co) is a financial crime risk quantification platform, regulated by the BaFin and ESMA, providing the market’s only authorised financial crime benchmark.  From our base in Siliconallee, one of Berlin’s most diverse teams works with global financial institutions and regulators with the goal of identifying, minimising, and pricing their financial crime risk exposure. 

About Frontline Ventures: Frontline Ventures (http://www.frontline.vc) is the venture firm for globally ambitious B2B businesses on both sides of the Atlantic. Frontline Seed strengthens and speeds up ideas at inception across Europe. FrontlineX is a go-to-market first, capital-second fund, for fast and frictionless US–EMEA expansion.

Today, Frontline has €225 ($275) million funds under management and has had numerous successful exits, including Pointy (acquired by Google), Logentries (acquired by Rapid7), and Orchestrate (acquired by CenturyLink).

About Seed X Liechtenstein: Seed X Liechtenstein (https://seedx.li/) is a Liechtenstein-based Venture Capital firm focusing on Fintech, Insurtech, Proptech and Legal Tech startups in Europe. Seed X is backed by leading institutions and personalities from the financial and industrial sectors. 

About APEX Ventures: APEX Ventures (https://www.apex.ventures/) is a Europe-based company builder backing technology ventures with a focus on unique and defendable intellectual property. APEX funds have completed investments among others in the fields of A.I. for medical applications, mobile forensics and insurance for autonomous vehicles. APEX just recently had a successful exit of one of its FinTech Investments (Lendflo).

About Big Start Ventures (BSV): Big Start Ventures (https://www.bigstart.vc/) is a Lisbon-based VC investing across all geographies. With special expertise in the financial sector, BSV focuses on seed-stage B2B Fintech, WealthTech, Regtech, Insurtech and Cybersecurity startups.

About the Founders: Shane Riedel, ex-Goldman, Standard Chartered and United Nations, and Filipe Garcia, former CTO at CrossLend, started Elucidate in 2018 to achieve their shared vision to rid the Earth of financial crime.


For more information about this press release contact press@elucidate.co

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