Alloy, which has built an identity operating system for banks and fintechs, announced Thursday that it has raised $100 million at a $1.35 billion valuation.
Lightspeed Venture Partners led the Series C round, which comes just over one year after New York-based Alloy raised $40 million in a Series B financing. Existing backers Canapi Ventures, Bessemer Venture Partners, Avid Ventures and Felicis Ventures all put money in the latest round, bringing Alloy’s total raised to over $150 million since its 2015 inception.
Alloy was founded primarily to fix a “broken” onboarding process that has historically involved manual review when people applied for bank accounts online. Put simply, the startup’s initial mission was to help banks and fintechs make better identity and risk decisions using its single API service and SaaS platform.
Over the last year, Alloy has evolved that platform to not only automate onboarding identity decisions but to also automate transaction monitoring and soon, credit underwriting. Also over the past 12 months, the company has seen its annual recurring revenue (ARR) triple and number of customers double, according to Alloy CFO Kiran Hebbar. Today, the company has more than 200 clients, including Ally Bank, HMBradley, Brex, Marqeta, Gemini, Ramp and Evolve Bank & Trust — up from 90 at this time last year.
Alloy connects its users to data from 120 identity providers, and then uses that data to help financial institutions avoid fraud during initial customer onboarding and when conducting ongoing transactions. Questions it aims to answer for banks and fintechs include: “Is this a real person? Will they defraud us?”
And it does it by giving them a way to create instant decisioning systems that are customized to their needs from a regulatory compliance and risk perspective.
“It’s really hard for fintech companies and banks to deploy products that are both safe for them, meaning they won’t take on a bunch of fraud or compliance losses, but also seamless for their users,” said CEO and co-founder Tommy Nicholas.