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The startup also has an instant settlement service that enables users to connect bank accounts and cards to the on-ramp to crypto.
Venture capital firm Andreessen Horowitz (a16z) led the $51.5 million Series B funding round for Sardine, a real-time fraud prevention product for financial technology and Web3 customers. The round was supported by XYZ, Nyca Partners, Sound Ventures, Activant Capital, Visa, Google Ventures, Eric Schmidt, Vikram Pandit, The General Partnership, NAventures, ING Ventures, ConsenSys, Cross River Digital Ventures, Alloy Labs, and Uniswap Labs Ventures.
Sardine uses TradFi data like bank account history and combines it with identity, behavior, and device intelligence to seek out risks. Their Know Your Customer (KYC) and Anti-Money Laundering (AML) verification services are used by crypto exchanges such as FTX and Blockchain.com. KYC and AML verification along with sanction and transaction monitoring are required by crypto firms to prevent fraud as users open and fund accounts and during transactions. The startup will use the funds for product development, marketing, and sales efforts.
Sardine CEO Soups Ranjan comments:
“Faster payments means faster fraud. As Zelle, RTP and FedNow become increasingly popular, consumers are increasingly vulnerable to social engineering attacks where they are convinced to buy something that never arrives or invest in a scam. Secondly, Financial Institutions only know that their customers bought ETH or USDC, not what they do with it afterward. What is needed is a new way of looking at fraud prevention, one which deeply inspects user behavior at the time of purchase, and combines it with what happens to the funds downstream. That’s exactly what we built at Sardine.”
The startup also has an instant settlement service that enables users to connect bank accounts and cards to the on-ramp to crypto. They can then purchase NFTs or any of the over 30 cryptocurrencies supported. Sardine also entered a deal with NFL great Tom Brady’s NFT Platform Autograph to provide a fiat to NFT checkout product.
Early this year, venture capital firm a16z announced that it had reserved $9 billion in capital dedicated to its Venture, Growth and Bio funds. In May, the firm announced that it had established its fourth crypto fund with $4.5 billion in the capital, $1.5 billion of which was earmarked for seed investments and the rest aside for venture investments.
“We believe Sardine is a key payments infrastructure provider across traditional and decentralized finance, and we’re proud to continue to support this team on their next stage of growth. Sardine’s fraud-fighting technology helps move money fast and without risk, and their rapid growth is a testament to the criticality and strength of their offering,” said a16z Growth Fund partner Alex Immerman of the funding round.