Series C Funding to Drive R&D, Fuel Vision for End-to-End Compliance Capabilities
A Texas-based anti-money laundering compliance firm raised $80 million to create a fully autonomous fraud detection platform building on the company’s foundation in machine learning.
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Austin-based Seon will use the Series C investment to automate tasks, improve decision-making efficiency and help scale fraud detection without increasing headcount, said co-founder and CEO Tamas Kadar. The company plans to expand beyond fraud prevention into AML, KYC and continuous transaction monitoring, with the aim of becoming an end-to-end compliance solution.
“We wanted to remain the fastest-growing fraud detection company in our space and at our scale,” Kadar told Information Security Media Group. “So for this, we have decided to tap into the market and find some extra fuel in order to be able to build further products for the large total addressable market and then penetrate the market more effectively.”
Seon, founded in 2017, employs 283 people and has raised $187 million, having last completed a $94 million Series B funding round in April 2022 led by IVP. The company has been led since its inception by Kadar, who got the vision for Seon while attending Corvinus University in Budapest, Hungary. Kadar praised lead Series C investor Sixth Street Growth for bringing hands-on operational value to Seon (see: AI Meets Fraud Prevention in LexisNexis-IDVerse Acquisition).
Why Fraud Analysts Need an Autonomous Detection System
Kadar said the Series C funds will help accelerate product innovation, specifically in the areas of AI-driven fraud detection, regulatory compliance tools and customer experience enhancements. He said Seon is shifting from being a fraud detection company to a broader, horizontal platform that encompasses fraud, AML, KYC and transaction monitoring, and the funds can be used to build features.
“We got offers up to $150 million, but we were quite conscious about that, it’s better for us to control our own destiny and then go out and potentially raise another round in the next two-to-three years if we need to,” Kadar said.
Seon has spent the past year analyzing how fraud analysts interact with the company’s platform, and are using those insights to reduce repetitive tasks, increase decision speed and eventually empower one analyst to do the work of 10, Kadar said. This will be achieved through AI summaries, decision support tools and smarter interfaces, which will reduce manual workload and increase operational precision.
“The goal is to build a fully autonomous fraud detection system,” Kadar said. “Early customers and early beta testers have been asking the same question, which was, ‘How can I increase my fraud detection rate? How can I increase my precision without creating any additional friction?’ We are hearing the exact same question today, and the goal here is empowering them to do more with less of their time.”
Historically, many financial institutions rely on separate, disconnected tools for onboarding, transaction monitoring and compliance reporting, and Kadar said this fragmentation created a market gap. Seon seeks to create a system where verification methods like ID scans or biometrics are only triggered when necessary, minimizing friction for legitimate users while creating roadblocks for suspicious activity.
“Seon would like to own a larger wallet share within the top accounts, which means that we have decided to build a very horizontal product strategy,” Kadar said. “If we cannot build it in house because of just time, then we will consider partnerships and also potentially acquire some other companies.”
Why Traditional KYC Methods Come Up Short
Traditional KYC methods such as document scans and ID uploads are expensive, outdated and vulnerable to fraud, and Kadar said these methods are very susceptible to darkweb leaks and deepfake manipulation. Conversely, Kadar said electronic identity verification methods such as SSN matching, national ID API integrations and mobile ID systems apply more verification only when risk signals indicate a need for it.
In regions such as Scandinavia, Kadar said mobile IDs are already the norm, while Europe’s forthcoming E-ID 2.0 regulations will require governments to open ID verification APIs, which Seon is already preparing for. Kadar said Seon’s long-term vision is to offer a dynamic friction engine that applies verification only when risk is detected, using data collected invisibly and in real-time.
“We would like to enable our customers to tap into this so-called dynamic friction experience so they can use our core friction-free and invisible risk assessment tools and then decide for which customers at what point in time based on specific behavioral changes they would turn on extra verification layers,” Kadar said.
Seon moved its executive team from Hungary to Texas to compete with major fraud prevention firms, which are mostly U.S.-based, and recently opened a Singapore office to support the fast-growing APAC market, where they already serve major clients like TikTok and Didi. The company plans to set up shop in Brazil to serve a region with growing digital financial activity but limited access to advanced fraud tools.
“Early this year, we made the move to open up a site in Singapore for GTM purposes, because we see the APAC market really fast growing,” Kadar said. “The next move will be to the Latin America market.”