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Fraud prevention startup Alloy raises $52M at a $1.55B valuation

Ryan Lawler
Illustration of piggy bank wearing a robber’s mask

Illustration: Eniola Odetunde/Axios

Alloy, an identity and risk management platform for the financial services industry, raised $52 million in new funding.

Why it matters: Fraud never sleeps — which is one reason investors continue to bet on Alloy and why its valuation has increased in a challenging fundraising environment for fintechs.

How it works: Alloy offers API-based tools that allow banks and fintechs to access customer identity, credit bureau data, and other information from more than 160 data sources.

  • Those institutions then use that information to onboard customers, make credit decisions, and fight fraud.
  • The company claims over 300 clients, including digital banks and fintechs like Ally Bank, Evolve Bank, Gemini and Ramp.

Of note: While the dollar amount is lower than its most recent fundraise of $100 million a year ago, this new round comes with a modest valuation bump — from $1.35 billion last September to $1.55 billion today.

  • Several existing investors also returned for this round, including Lightspeed Venture Partners, Canapi Ventures, Bessemer Venture Partners, Avid Ventures, and Felicis Ventures.

Between the lines: “It's a terrible time to raise money,” Alloy founder and CEO Tommy Nicholas says. “But we were in a pretty unique position. We still had $100 million in the bank, and we were doing quite well.”

  • However, “we wanted to be able to stay aggressive without over-diluting the company," he says. "We don't need to raise $200 million and dilute the company at current prices when we think there will be better prices in the future.”

What’s next: One area where Alloy wants dry powder to invest is the expansion of its international business.

  • Last month, Alloy announced it was going global, with availability in 40 countries across North America, EMEA, LATAM and APAC.
  • According to Nicholas, Alloy plans to expand international business with existing customers first, before looking to sign up new customers in foreign markets.
  • “We want to be able to help people scale seamlessly globally with one platform — that's goal number one,” he says. “And then goal number two is, there are a lot of global companies in other jurisdictions that we would like to sell into.”
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