Flagright, an AI-powered financial crime compliance platform, has closed a $12.5m Series A funding round as it moves to establish itself as the infrastructure standard for regulated institutions managing financial crime risk.
The round was led by Infinity Ventures, with participation from Sella and continued support from existing backers Frontline and Y Combinator. The capital will be directed towards expanding explainable AI capabilities across compliance operations and strengthening the company’s presence in the US market.
Flagright intends to deepen AI functionality across investigation workflows, alert intelligence, rule optimisation, decision support, and audit-ready processes. The company also plans to grow its enterprise go-to-market activity, targeting banks, FinTechs, credit unions, and other regulated financial institutions seeking to replace outdated or fragmented compliance infrastructure.
The platform brings together transaction monitoring, watchlist screening, risk scoring, case management, AI forensics, and governance workflows within a single unified system. Its architecture combines compliance modules, enterprise-grade workflows, and explainable AI capabilities designed to support FinCrime teams with alert investigations, system optimisation, recommendation improvements, and decision support, while maintaining human oversight and transparency throughout.
Flagright’s proposition addresses a growing tension within the compliance sector. Many regulated institutions continue to rely either on legacy systems that lack adaptability or on disconnected point solutions that generate operational complexity rather than reduce it. Across banking, payments, lending, brokerage, and credit unions, firms are under pressure to process greater volumes, meet stricter regulatory requirements, and respond to more sophisticated financial crime threats, all while integrating AI into day-to-day operations.
Flagright CEO and co-founder Baran Ozkan said, “The financial crime compliance stack is being rebuilt, and Flagright is the company to define the operating system layer for this category. Regulated financial institutions need a system that gives them speed, control, explainability and auditability in one place.
“This round helps us accelerate our position as the enterprise standard for financial crime compliance by expanding explainable AI use cases across compliance operations and increasing our US market presence, while we continue serving sophisticated clients with the reliability and depth they expect from a mission critical software.”
Madhu Nadig, CTO and co-founder of Flagright, added,”AI in compliance only matters if it is explainable, governable, and useful in real operations. The market does not need another black box tool. It needs an operating system that brings monitoring, screening, investigations, governance, and explainable AI together in one place. We are building the system of choice for sophisticated institutions that need AI they can trust, audit, and operationalize at scale.”
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