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Salv: The startup against money laundering raises $ 2 million

Salv, a startup against money laundering (AML) founded by former employees of TransferWise and Skype, has raised $ 2 million in initial funds.

The round is led by Fly Ventures, along with Passion Capital and Seedcamp. Angel investors who also participate include the founder of N26, Maximilian Tayenthal (who seems to be investing quite a lot), former Twilio chief technology officer, Ott Kaukver, and Taavi Kotka, former chief information officer of Estonia (the real country!).

Founded in June 2018 and initially offering consulting, Salv, based in Estonia, has created a software platform that helps banks find and stop financial crime. The idea, says co-founder and CEO Taavi Tamkivi, is to take the AML beyond compliance to something more proactive that really defeats the crime. That is a great promise, although he and his co-founders have a lot of experience to take advantage of, both in fast-growing startups and in AML.

Tamkivi created the AML, fraud and Know Your Customer (KYC) teams on TransferWise and Skype. The chief operating officer, Jeff McClelland, also worked on the Skype anti-fraud team, followed by a period at TransferWise, first as an analyst and then at RR. H H. And the CTO Sergei Rumjantsev was also previously at TransferWise, leading the engineering team responsible for KYC and verification.

“This was a very demanding role, especially given how fast TransferWise was growing, how many new markets were online and how central is user verification for compliance”, Tamkivi tells me. “Under Sergei’s leadership, the team made the verification process incredibly simple over time for genuine customers. But also robust enough to protect TransferWise from the incorporation of bad actors”.

Bad actors within financial services abound, of course. However, despite the fact that the European banking sector spent billions to address the problem, it is estimated that only 1 to 2% of global money laundering is detected.

“The AML should have to do with stopping money laundering, but, particularly in the last decade, layers and layers of regulations have been added for banks to comply with,” says Tamkivi. “This would be great if that meant there would be no more money laundering, but unfortunately, that is far away.” Today, it still washes between $ 1-2 billion a year. But excessive regulations mean that almost all of a bank’s compliance team effort comes into compliance. They have very little energy left to really focus on improving their financial skills to fight crime. The software they use is similar, it focuses almost entirely on compliance, not the fight against crime”.

That’s where Salv wants to intervene, and Tamkivi says that the main difference between the AML software of the startup and other existing solutions is a much greater emphasis on the fight against crime rather than a brand compliance exercise.

“Our goal is to create a transformation similar to what happened in the virus analysis”, he says. “10-15 years ago, virus scanners on everyone’s PCs were a huge nuisance, they consumed tons of resources and prevented them from doing the job. The same is true in today’s financial institutions. They are using obsolete and heavy software and processes to handle AML. But today, virus scanning still occurs, but nobody cares. It happens in the background, with few resources. We will do the same in the AML world”.

In addition, the CEO of Salv says that the company’s software is faster than the offers of the competitors, both in terms of configuration and integration time, as well as making changes to the rules to which the system adheres.

“Our system, on the other hand, takes a month or less to configure and minutes to modify the rules”, he says. “As a result, our clients can take everything they learn today from new criminal patterns, code it into automated rules tomorrow and repeat that cycle every day to protect their bank. Moving fast is the only way to keep up with innovative organized criminals who move millions or billions around the world”.

To that end, Salv already has the Estonian bank LHV as its first customer. “They offer a complete set of banking products in Estonia”, says Tamkivi. “They are also active in London, in particular, supporting fintechs. We have another pair of clients in the Lithuanian fintech scene. One of them is DeVere e-Money”.

More generally, the Salv product is said to be suitable for Level 2 and Level 3 banks, as well as for fintechs and regulated challengers.

Meanwhile, the business model is quite simple. Salv charges a monthly subscription, while the price varies depending on the number of active clients that a bank or fintech has.


Also published on Medium.

Published inStartups

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