Fraud and compliance platform startup Sardine lands $19.5M in funding from Andreessen Horowitz and NYCA to protect fintechs and neobanks from crypto frauds

The popularity of bitcoin and other cryptocurrencies has led to an increase in crypto-related scams and frauds. According to a January 2022 report from CNBC, fraudsters and scammers around the world took home a record $14 billion in cryptocurrency in 2021, thanks in large part to the rise of decentralized finance, also known as DeFi. But one startup is about to take the fight back to the fraudsters and protect fintech companies and neobanks against future frauds.

Sardine is a San Francisco-based tech startup and provider of a behavior-based fraud and compliance platform for digital wallets and neobanks. Its products are used by leading fintech, crypto, and NFT companies to prevent account opening, funding, and payments fraud. Sardine’s team is behind the fraud prevention and compliance infrastructure that scaled both Coinbase and Revolut.

Today, Sardine said it raised $19.5 million in Series A funding from Andreessen Horowitz, NYCA, and Experian Ventures to enable companies to protect customers from financial fraud. The startup will use the capital infusion to scale its growth, as well as to further product development and hiring aggressively in the coming months. In conjunction with the funding, Sardine also announced that Andreessen Horowitz General Partner Angela Strange has joined XYZ’s Ross Fubini on its board of directors.

The latest funding comes amid strong growth and company momentum. Since its launch last Spring, Sardine now powers over 50 customers, including some of the largest neobanks (Brex and Chipper Cash), fast-growing crypto exchanges (FTX, Luno, and Bakkt), and global NFT and crypto platforms (Abra, Transak, MoonPay, and Candy Digital).

In addition, Sardine also announced that it has extended its industry-leading fraud prevention platform to now enable instant bank ACH transfers for crypto on-ramps. This removes the traditional 3-7 day waiting period for consumers before they gain access to their funds while Sardine assumes all fraud, regulatory compliance, and legal risks. By providing the industry’s most comprehensive fraud prevention in one API, Sardine delivers the fastest and safest way to on-ramp crypto.

Founded in 2020 by Aditya Goel, Soups Ranjan, and Zahid Shaikh, Sardine’s platform is developed by a team of Coinbase, Revolut, Google Pay, Bolt, and PayPal veterans who uniquely understand the pain and expenses associated with fintech fraud. According to the company, its platform has already been proven to stop 3x more fraud than legacy e-commerce fraud products.

Sardine is uniquely suited to provide Instant ACH transfers based on its core technology, which uses AI to provide a real-time fraud score based on the user’s identity, device, and behavior patterns at the time of account origination and account funding. It also continuously monitors for fraud during account login, deposits, and withdrawals. Customers simply integrate Sardine’s SDK into their web or mobile apps, and Sardine handles the rest.

“It’s an amazing time, as the very concept of money is being reinvented with the rise of fintech and crypto digital wallets,” said Soups Ranjan, CEO and co-founder of Sardine. “However, it is still a very frustrating experience for customers that expect to instantly move money from legacy banks into their new fintech, crypto, DeFi, or NFT wallets. It is incredibly hard to establish trust in whether someone is using their own bank account to load money into a wallet or a stolen one. Sardine has built a behavior-based platform that uses tens of thousands of data points about a user’s behavior and combines that with dozens of data sources, ranging from phone and email to social media and blockchain analytics, to establish a real-time trust score,” he added. “Today, we can eliminate all of the complexity associated with payment fraud by offering indemnification against fraud losses during money load events.”

“Our investment in Sardine is perfectly aligned to Experian’s fraud capabilities and our work to stop fraud in digital commerce and payments,” said Kathleen Peters, Chief Innovation Officer, Experian Decision Analytics in North America. “Sardine is on the path to being a market leader in preventing financial crime with their talented team and innovative products. Experian is always looking for new investments and partners that can bring groundbreaking technology and problem-solving solutions to the market.”