AML and fraud prevention RegTech Hawk AI scores $17m in Series B


Germany-based RegTech Hawk AI, which provides AML and fraud prevention technology to banks and payments companies, has secured $17m in its Series B.

Sands Capital served as the lead investor, with participation coming from both new and existing investors, including DN Capital, Coalition, BlackFin Capital Partners, and Picus Capital.

Funds from the Series B have been earmarked for product development and global expansion.

Hawk AI leverages explainable AI and cloud infrastructure to help financial institutions detect and prevent financial crime. Its technology is able to spot crime other systems miss and empowers efficient investigations of suspicious account behaviour in a user-friendly case management environment.

Its technology can reduce false positive rates by 70%, compared to legacy AML/CFT solutions.

Hawk AI explained that over $2trn is laundered annually, fraud losses in the US exceeded $41bn in 2022 and fraud levels increased by 37% in high-growth markets over the past 12 months.

 With this, financial institutions are under constant pressure to improve their transaction monitoring, screening, and customer due diligence initiatives to protect their business. Leveraging an explainable AI enables these institutions to uncover more financial crime, but reduce false positives.

Speaking on the Series B, Hawk AI CEO and co-founder Tobias Schweiger said, “My co-founder Wolfgang Berner and I started this business based on the strong belief that only leading-edge, real-time surveillance technology can deliver the change needed to fight financial crime. This contrasts the obvious, drastic deficiencies in legacy technology.

“Hawk AI’s growth will continue to be fuelled by industry-wide demand for AI, Cloud outsourcing, and a convergence of Fraud and AML technology. This funding will allow us to reach our ambition to become the leading global surveillance platform faster.”

This Series B comes after a strong period of growth for Hawk AI. It experienced 298% year-over-year revenue growth and added Singapore to its global footprint. It now has presence in Munich, London, New York, San Francisco and Paris.

The AML and fraud prevention company operates in over 60 countries across Europe, North America, Asia and Latin America, processing billions of transactions for customers.

Sands Capital principal Chris Eng added, “Financial crime has historically been challenging to identify due to the complexity of financial structures and regulations. Hawk AI’s sophisticated technology and use of explainable artificial intelligence present critically needed straightforward solutions for institutions across the payments landscape.”

Hawk AI previously raised $10m for its Series A funding round in June 2021. The round was backed by Blackfin Capital Partners and Picus Capital.

Last year was busy for the AML and fraud prevention company. In November, Hawk AI joined the Visa Fintech Partner Connect Program. This deal provides Visa’s financial services clients with access to Hawk AI’s real-time, cloud-native platform. Through this, they can streamline and automate financial crime prevention.

Another development in late 2022 was a partnership with fellow RegTech company Know Your Customer. The duo combined Know Your Customer’s digital onboarding and business KYC solutions with Hawk AI’s transaction monitoring capabilities. Companies can use the joint solution to harmonise and centralise their AML programme.

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