Baselayer, a B2B platform company that utilizes proprietary Graph AI technology to combat fraud and optimize business onboarding, announced it emerged from stealth mode with a $6.5 million seed round. The seed funding round was 5x oversubscribed and included investments from Torch Capital, Afore Capital, Founder Collective, Picus Capital, Gilgamesh Ventures, and notable financial industry executives, including Eric Woodward, former President of Early Warning Services, Jason Mikula, executives from Stripe, Brex, Valley Bank, Airbase, and 15 other fintech founders.
Baselayer has signed about 30 customers in under six months, including Rho and one of the top five loan infrastructure systems. And Baselayer expanded its total reach to over 25 million potential business accounts.
The banking industry faces many challenges verifying small businesses during Know Your Business (KYB) reviews. This results in lengthy manual processes that could span days or weeks. This has become even more challenging with the advancement of fraud strategies and the increasing prevalence of fraud, which cost global banks $500 billion last year. Fraud poses an escalating threat to the revenue and growth of traditional banks and fintechs, complicating efforts to quickly validate the legitimacy of business customers.
Baselayer co-founders Jonathan Awad (CEO) and Timothy Hyde (CTO) found themselves unable to secure a business banking account due to multiple bank failures in early 2023. However, they quickly identified that they were not the only new company experiencing the issue, which left them unable to pay bills or vendors. With no solution besides waiting over a month for manual review processes to unfold, they decided to build one themselves. Specifically, they saw an opportunity to utilize artificial intelligence-generated knowledge graphs, in which Hyde had expertise after building and selling a machine learning company to a Fortune 500 company.
With the funding, Baselayer plans to double down on investing in and scaling its platform, refining and building out new features in its GenAI model and implementing them.
KEY QUOTES:
“For a new or small business, waiting days or weeks to have access to a bank account can be devastating. Without a bank account, it’s impossible to run a business, and as fraud has gotten more sophisticated, it’s become even more difficult for banks to verify small or new companies. We saw this problem firsthand, so we built our own solution that provides all banks, lenders, and payments companies on our platform access to fraud sharing on businesses that does not exist anywhere else in the market. Baselayer can now identify, assess and predict the risk of all potential business customers in real-time, eliminating the friction that has previously existed in the KYB process to provide more security to the banking system than ever before.”
- Jonathan Awad, CEO and Co-Founder of Baselayer
“All consumers will ultimately be businesses. This underscores the importance of banks and providers being able to quickly and accurately assess and verify the identities and risks of small businesses at scale. While there have been tremendous innovations in consumer verifications, there has not been a comparable solution in the market to secure and simplify the KYB process, which Baselayer is now uniquely providing.”
- Eric Woodward, former President of Early Warning and creator of Zelle Risk
“Working with Baselayer has been a game changer for us. Baselayer helps us accurately verify business applicants and get new Rho customers up and running on our platform significantly faster, while also supporting the integrity of our world-class compliance operations.”
- George Remennik, Acting Chief Compliance Officer, Rho
