Bits Technology Finalizes €4M Seed Round to Serve as European Business Identity Platform

Bits Technology, the Stockholm-based startup that focuses on business and customer identity, announces a new €4 million seed funding raise that will help the company further its mission of reshaping how future fintech products are built.

Bits will use the funds from the investment round “to fast-track its product development and go-to-market strategy so that organizations can significantly strengthen their important identity and anti-money laundering processes against ever-evolving threats.”

The round is “led by Unusual Ventures with additional backing from Fin Capital.”

All major existing investors “from last fall’s pre-seed round, such as Cherry Ventures and Alliance Ventures, also participated.”

As noted in the update, the identity and anti-money laundering (AML) space, “which includes important processes like Know Your Customer (KYC) and Know Your Business (KYB), currently presents several administrative hurdles for businesses.”

Yet, on the flip side, these areas “present massive opportunities for improvement — and Bits are fixing them.”

  • Eliminate the need for a single provider: The major challenge customers face is to be locked into a specific provider or data source for these services, which may halt their ability to grow and evolve their services.
  • Provide central visibility: Many companies try to fix the mentioned single provider lock-in, by triaging multiple systems for different purposes. But that, in turn, limits central visibility into data and affects the onboarding of new customers and users.
  • Creating customizable solutions: Together, these providers and systems are rigid. Systems tackling onboarding, monitoring, and AML need to be customisable to adapt to each customers’ unique needs.

Following this seed round, Bits Technology is in 2023 “launching a suite of products for the European market, including a no-code solution and API offering.”

The platform “enables customers to easily create dynamic onboarding flows that can be scaled seamlessly across multiple markets without worrying about local compliance regulations, nor integrating new service providers.”

Meanwhile, the platform will “empower teams to create a tailored onboarding experience and a customer reporting solution for AML and user management.”

This solution “equips teams with collaborative tools in a single view, enabling them to access actionable data, customise rules, assess risk, prevent fraud, and maintain compliance.”

Bits Technology is poised to streamline the identity and AML space by “providing customers with greater flexibility, customization, and efficiency.”

Jonatan Klintberg, CEO & Co-founder at Bits Technology, said:

“At Bits we build for a seamless user journey in the necessary KYC processes – which are fundamental in order for businesses to both convert and comply. By utilising Bits, customers can conveniently access all the necessary data for effectively managing and taking action on their customer and user onboarding. By using Bits’ platform, businesses of all sizes can create a single view over the necessary user information–irrespective of the number of data sources and service providers involved.” 

From a market perspective, identity and AML services “present a significant opportunity for growth and innovation driven by an increased complexity in financial regulations and digital technologies.”

According to the company, the compliance and risk management software market in Europe is expected “to be worth $70bn by 2027 driven by factors such as increasing regulatory pressure, rising financial crimes, and the need for more sophisticated identity verification and monitoring solutions.”

Lars Albright, General Partner at Unusual Ventures, said:

“We are thrilled to partner with the team at Bits Technology as they tackle some of the biggest challenges in the identity and AML space. We see a large and rapidly growing market in this category, but winning requires world-class founders with deep expertise. We were impressed by the bold vision and innovative approach of the Bits founders and team, and this is what makes them a perfect fit for our portfolio. We’re excited to support their efforts to bring cutting-edge solutions to market.”

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