Shield bags $15M Series A to address surging demand for its AI-powered communication compliance platform
Over the past two years, since the pandemic hit, there has been a sharp rise in financial crime compliance costs, nearing $50 billion in 2021, up 58% compared to 2019, in the U.S. and Canada. Shield, a Tel Aviv-based startup, built a compliance surveillance platform to enable regulated financial institutions to detect market abuse, gain behavioral analysis, mitigate toxic workplace culture and automate surveillance over employee communication channels.
Today, the company announced it has closed a $15 million Series A round co-led by Macquarie Capital and OurCrowd, with participation from Mindset Ventures.
The startup will use the funding to significantly expand its U.S. presence with a New York City office while further establishing itself in markets throughout Europe, the Middle East, Africa and Asia. It will also ramp up the development of its communication compliance platform.
As remote and hybrid work environments become more permanent, global banks have come to rely upon compliance platforms, co-founder and chief executive officer of Shield Shiran Weitzman said. The capital infusion comes at a time when the industry is actively seeking cloud-based solutions – evidenced by Shield’s recent signing of a tier-one global bank as a client.
Its tailored platform applies advanced artificial intelligence and natural language processing (NLP) capabilities through rigorous data enrichment, powerful analytics, enhanced search tools, and proactive surveillance. The startup allows organizations of any size and across industries to mitigate risks, escape time-consuming data silos, improve operational efficiency and reduce compliance costs.
“The ability to access and understand new and evolving communication channels is increasingly becoming a pain point for organizations, no matter the industry, and this funding round is well-timed as it will empower us to scale our technology and enhance our already robust platform that addresses compliance concerns that enterprises deal with daily,” Weitzman said. “As a bootstrapped company, we’ve already proven that our AI platform is unquestionably valuable to banks and financial institutions.”
Financial regulations obligate financial institutions to capture every communication channel used for regulated employees such as traders, back-office employees, and others Weitzman told TechCrunch. The employees know that the financial institution monitors specific channels, Weitzman added. Shield takes extra measures to maintain privacy with its proprietary privacy content recognition (PCR) engine that automatically masks personal identifiable information from the communications via emails, chats, fin-chats, and voice recordings.
Shield is currently monitoring more than 150,000 regulated employees and analyzes over 53 million interactions in a day, Weitzman said, adding that it has been more than tripling its revenue year to year since established in 2018. Weitzman noted that the company has a year-over-year growth of 200% in customers.
According to Polaris Market Research, the global market for enterprise governance, risk & compliance is projected to reach almost $97 billion by 2028.
“In order to support hybrid working, better manage to change compliance and regulatory requirements and the need to be cloud-native Shield has adopted a new architectural approach to software development. Shield’s leading edged software platform, agile development philosophy and ability to rapidly implement its solution to deliver more immediate benefits to customers positions Shield to be a new market leader” said David Standen, Co-Head Venture Capital Group, Macquarie Capital. “We are excited to be the lead investor and support the aspirations of the very talented team at Shield.”