AI Fraud Detection Startup ThetaRay Raises $57 Million to Expand

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ThetaRay, a startup that uses artificial intelligence to detect money laundering and other financial crimes in international transactions, raised $57 million in an investment round led by Portage Capital Solutions.

The New York-based company, which counts Banco Santander SA, Travelex, and Dubai’s Mashreqbank PSC among its customers, will use the funding to expand its customer base and global presence, ThetaRay said in a statement to Bloomberg on Tuesday.

Existing investors Jerusalem Venture Partners and OurCrowd also joined the round. ThetaRay declined to disclose its valuation.

The company has raised $150 million overall and has offices in Hod Hasharon, Israel, London, Madrid, and Dubai.  

The investment comes as financial institutions record a sharp rise in fraud, much of it buoyed by new AI tools, despite record spending on detection and prevention. In the US alone, consumers lost almost $8.8 billion to scams last year, an increase of more than 30% from 2021, according to the Federal Trade Commission. 

“This is an issue that banks and payments companies, fintechs more generally, are struggling with around the world and this technology is a fantastic use case for AI in terms of a more effective way to identify suspicious transactions,” Portage partner Devon Kirk said in an interview.

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