Israel’s AI fintech startup ThetaRay raises $57 million in funding to secure global payments

ThetaRay, an Israeli AI fintech startup that uses artificial intelligence (AI) to identify financial cyber threats, has raised $57 million in a private funding round led by global fintech platform Portage, with participation from existing investors JVP, OurCrowd, and others.

The new capital will be used to accelerate ThetaRay’s global growth plans and capitalize on the growing demand for next-generation financial crime detection technology. The company plans to expand its sales and marketing efforts, as well as invest in research and development.

The funding round comes at a time when financial institutions are under increasing pressure to improve their cybersecurity defenses. The global cost of financial crime is estimated to be over $2 trillion per year, and banks and FinTechs are looking for ways to mitigate their risk.

In conjunction with the funding, ThetaRay also announced it has appointed Peter Reynolds, who had spearheaded the company’s growth as Chief Revenue Officer, as CEO.

In a statement, ThetaRay’s new CEO Peter Reynolds said: “Global payment infrastructure too often fails to accurately differentiate between perfectly legitimate transactions and ones from bad actors dealing with illicit funds. We’re proud to be at the forefront of the revolution to make global transactions easier, safer, and cheaper and are keenly aware of the massive vote of confidence this investment is in both our technology and our team.”

ThetaRay’s AI-powered platform is used by banks and financial institutions to detect and prevent financial crimes such as fraud, money laundering, and terrorist financing. The platform is able to analyze vast amounts of data in real-time, identifying patterns and anomalies that may indicate criminal activity.

Founded in 2013 by Amir Averbuch and Ronald Coifman, ThetaRay’s technology uses AI to offer banks and fintech companies a secure avenue to enhance their cross-border payment operations. Its SONAR transaction monitoring solution not only boosts customer satisfaction but also delivers cost savings in compliance efforts while broadening risk coverage. The startup has offices in New York, Madrid, London, Dubai, and Tel Aviv, Some of ThetaRay’s customers include the world’s foremost financial institutions such as Santander, Travelex, Mashreq Bank, MFS Africa, and ClearBank.

“We are excited to support ThetaRay as they bring their market-leading, AI-powered technology to new customers globally,” said Devon Kirk, Partner and Co-Head of Portage Capital Solutions. “We know that Banks and FinTechs are looking for ways to grow their businesses while managing risk and compliance costs and that in many areas, including AML, legacy systems are simply not working. ThetaRay is bringing much-needed innovation to enable transactions and fight financial crime.”

The decline of global interbank corridors by 40% due to risk-averse payment networks has disrupted global trade, rendering cross-border payments increasingly challenging, unpredictable, and costly. ThetaRay is reshaping this landscape, ushering in an era of financial inclusion that unlocks business opportunities across regions and industries.

As a result, ThetaRay has achieved remarkable business growth, with its client base expanding more than tenfold over the past two years. Existing customers have witnessed an astounding net dollar retention rate of over 180%, contributing to annual recurring revenue (ARR) growth exceeding fivefold.

“Portage’s deep expertise in the FinTech and Financial Services space makes them the ideal partner as ThetaRay embarks on a new chapter of growth and geographic expansion,” said Erel Margalit, Founder and Chairman of JVP and Chairman of ThetaRay. “Guided by the adept leadership of Peter Reynolds, the resolute ThetaRay team stands ready to expand its financial technology footprint across continents – spanning North America, South America, Europe, Africa, and Asia – and venture into uncharted realms of innovation.”