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Exclusive: Baselayer raises $6.5M to be FICO score for businesses

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Illustration: Aïda Amer/Axios

Baselayer, a business banking fraud prevention startup, raised a $6.5 million seed, it tells Axios exclusively.

Why it matters: The startup wants to make it easier for small to mid-size companies to open accounts and get loans.

  • Investors include Torch Capital, Afore Capital, Founder Collective, Picus Capital and Gilgamesh Ventures.

What they're saying: "When a person gets a mortgage, the bank asks the credit bureau for their FICO — their credit score," CEO Jonathan Awad tells Axios.

  • "No one is tracking employer ID numbers the same way you do a person's Social Security number," he adds.

How it works: Serving banks, neobanks and government agencies, Baselayer pulls company documents from the IRS and secretaries of state offices to verify the identity of a business when it's seeking to open an account or apply for a loan or grant.

  • Baselayer also looks at liens, litigation and bankruptcy data acquired from various courts.
  • Baselayer pools anonymized fraud data from its customers to check the likelihood of a transaction being fraudulent, as well as using large language models to verify a business' legality.

Zoom in: "We flag incongruences," says Awad. "For example, you sign up for a free trial, but in terms of service, you automatically get enrolled to a $50 a month charge. That's where a lot of AI is coming in to predict this ... might be a fraudulent attempt."

  • Baselayer scores the riskiness of a business, creating a dossier that also flags whether it's in a high-risk industry like cannabis.
  • The company is paid each time it pulls information on business, and it provides ongoing portfolio monitoring.

Context: Awad conceived Baselayer after spending a month-and-a-half trying to open a bank account for his nascent business.

  • Required by law to verify that a company is genuine and legal, the bank requested additional information that Awad says could have been directly pulled via API from government databases.
  • Eventually, Awad gave up on the application and got an account with Mercury.

State of play: In the age of real-time payments, financial institutions and neobanks are being encouraged to share data on potential crime, despite concerns about it dulling their competitive edge.

  • A plethora of data-sharing, fraud prevention consortiums have emerged in the last year from players including Plaid, Unit21 and Sardine AI. That's in addition to bank-focused Early Warning Systems — though most have focused on cases where consumers are the end customer.

Editor's note: This story has been corrected to note Baselayer raised $6.5 million, not $6.2 million.

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