In a sign of the robustness of the regtech software market, ThetaRay, a provider of artificial intelligence software for detecting financial crime, has completed a fundraising round of more than $30 million — its largest to date.
Investors include Jerusalem Venture Partners, General Electric, Bank Hapoalim, OurCrowd and SVB Investments. The company has raised more than $60 million all told.
Globally, the anti-money-laundering market is expected to generate $4.26 trillion in revenue by the end of 2026, according to Transparency Market Research.
"Regtech is an area that is primed for investment as banks look for ways to improve detection and better automate compliance," said Al Pascual, senior vice president of research at Javelin Strategy & Research. "This is especially true as AI-based solutions are likely to provide a clear and immediate [return on investment] by lowering operating costs, as well as the potential for long-term savings from reduced exposure to regulatory fines."
In late June, ABN Amro announced it was using ThetaRay to alleviate the risks of money laundering and financing terrorists. OCBC Bank has used ThetaRay to weed false positives out of its suspicious activity reports.
Mark Gazit, ThetaRay's CEO, said one of the largest U.S. banks and a few smaller ones are using the company’s software. The Israel-based company opened a New York office a year and a half ago, and it plans to open another on the West Coast. It also plans to expand its presence in Europe and Asia.
ThetaRay's machine learning and artificial intelligence technology helps financial institutions identify signs of money laundering. Other providers of this type of software include Zest, Merlon Intelligence, QuantaVerse and Attivio.