Melbourne start-up lands $23m raise from crypto giants, Airtree.
By Mark Di Stefano | The Australian Financial Review | Nov. 29, 2022 5:00 am EST
Two of the biggest names in the global cryptocurrency industry have backed an Australian start-up that does background checks on potential customers, as the tech industry grapples with how to verify people online.
The investment arms of crypto exchanges Binance and Kraken have joined local fund AirTree Ventures and US firm Greycroft in injecting $23 million of new funding into Melbourne-based FrankieOne. The Series A was extended to take the total funding for the round to $45 million.
FrankieOne is a so-called “regtech” platform, which means the start-up helps big companies like Westpac, Shopify and Afterpay with regulatory compliance. The start-up takes hundreds of data sources, for example from credit and data providers, to cross-check potential customers’ identities.
Co-founder Simon Costello pitches the platform to customers as the “Amazon of K-Y-C A-M-L” checks, meaning it is a one-stop shop for various Know-Your-Customer and anti-money laundering verification needs.
“Right now it’s a highly fractured space and there are lots of different players, like Equifax and Experian, etc,” Mr Costello said. “There are also many tools around the world, but FrankieOne has integrated with over 350 different vendors and data sources, and we bring it together into a single platform.”
K-Y-C: H-E-L-P
Mr Costello said he and business partner Aaron Chipper conceived the start-up in 2019 as another neobank, before being drawn into building tools for online verification. Now, it operates with the backend of companies’ verification systems.
Mr Costello would not disclose the pre- or post-money valuation of the start-up following the $45 million round, but said revenue had grown by four times over the past 12 months.
FrankieOne recently set up an office in San Francisco and aims to expand in the North American and Asian markets.
The involvement of Binance Labs and Kraken Ventures as new investors suggests FrankieOne may delve deeper into the crypto industry, which has been overrun with controversy and outright fraud in the past 12 months.
Binance is the world’s largest crypto exchange, according to Coin Market Cap, and is led by chief executive Changpeng Zhao, who recently played a key role in exposing the alleged fraud at competing exchange FTX. Kraken is the third-largest exchange in the global market.
Mr Costello said the start-up’s tools were the “picks and shovels” of online verification, regardless of industry – perhaps even having the potential to help new Twitter owner Elon Musk with his ambitious plans to verify users who want to tweet on the social media platform.
“Two years ago, we were all talking about buy now, pay later and that was amazing, and we assisted all those companies,” he said.
“Until only six months ago, it was crypto, and so we’re assisting crypto [companies].
“You also have extremes of Elon Musk ... [and] now we’re going into a poor economic climate, so we’re seeing [more] fraud and ... money laundering.”
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