Announcing our Series-B led by a16z Growth
Sardine is thrilled to announce that we raised Series-B financing from new and existing investors. This year alone, we’ve tripled our customer base to reach 135+ clients, launched our crypto and NFT on-ramp products, and continued to invest in our world-class fraud engine. This is a major milestone for our team and community, and we’re excited to share why.
The explosive growth of Fintech and Crypto over the past 24 months has led to more choices for consumers and merchants and more real-time payment experiences. Crypto and Fintech face regulatory scrutiny but are here to stay.
Fraud attacks targeting Fintech and Crypto wallets grew by 70% in 2021. Sardine data shows that consumers buying Crypto with cards can face a decline rate of higher than 50%. This all comes as the regulators cast a critical eye on Fintech and Crypto businesses and real-time payments.
- Fintech and Crypto wallets suffer high fraud losses and high decline rates, damaging growth and consumer experiences.
- Self-custody wallets and DeFi projects are often unable to access the traditional financial rails, damaging their growth.
- Financial Institutions see high fraud losses and customer complaints as they decline transactions happening in the Fintech and Crypto economy. This is exacerbated by the introduction of real-time payments in the United States.
The parallel financial systems mean everyone in financial services has a gap in the visibility that would allow them to prevent fraud and provide real-time experiences.
But as these two financial infrastructures exist in parallel, preventing fraud and providing better consumer experiences means understanding both worlds.
A client saw 98% of consumers who initiated an NFT purchase complete it successfully.
This is unheard of in the crypto/NFT space as conversion rates for card-based crypto or NFT purchases are abysmally low at ~50% or ~80% respectively.
Our thesis is that payment & fraud prevention are two sides of the same coin. If you go deep on how the fraud works, you can make the payment work efficiently.
We need real-time and risk-free payments to unlock the next industry growth phase.
Sardine’s vision is to allow anyone to pay, using any rail, instantly and risk-free.
And that’s where Sardine comes in. We cut our teeth in Fintech and Crypto fraud prevention and learned that the more data signals we see, the better we can detect and prevent fraud. And if we see more data, we can make payments in real-time too.
If you figure out Fraud, you figure out payments and growth.
Yet, when you spend enough time in Fintech, you figure out better fraud and compliance results equate to more payments and growth.
Experience in Fintech teaches you that if you operate an online store or Fintech wallet that is suffering high fraud losses, at first, you might not even be aware it’s happening. Then by the time you do, not only have you started to accumulate losses, your customers will see their cards decline when they try to swipe in-store or buy online. High fraud rates create bad payment experiences that deter customers and damage growth for all customers.
This has, unfortunately, been an unspoken rite of passage for many Fintech companies.
But it doesn’t have to be that way.
Sardine was founded and is staffed by a super group of Fraud, Payments, and Compliance experts who have worked across Fintech, Financial Services, and Crypto. This supergroup has built the platform they wished they had in their previous jobs. While there are many fraud and compliance solutions, there was often no way to bring them together and instantly benefit from the expertise of the Fraud teams that built the tools. Sardine has the most flexible and powerful fraud-fighting tools by fraud nerds, for fraud nerds, and builders too.
Today, we help our customers like Blockchain.com, Brave, and Wealthsimple improve their customer experience and create growth. How so? By reducing fraud, building seamless NFT and crypto onramps, and offering instant settlement for users to purchase 30+ crypto products, including tokens and NFTs.
Payments are becoming instant.
Sardine’s vision is a world where payments are instant and risk-free. “But faster payment often means faster fraud”. It doesn’t have to.
Real-time payments are growing at 33% YoY. Payments are better when they’re instant. More instant payments create better consumer experiences and allow merchants to get paid instantly, unlocking economic activity. But instant payments often mean instant pain for merchants and Fintech businesses in the form of fraud losses or high decline rates.
At Sardine, we will unlock real-time payments on any rail for consumers and wallets and reduce the fraud losses of the entire industry. Because if you understand what causes the decline or what would lead to the delay, you can make more payments more seamless. This will help grow the entire fintech industry because less fraud implies more real-time payments. And more real-time payments equate to more transactions in the Fintech economy.
One rail Sardine is uniquely positioned to enable is Crypto. Web3 and DeFi present a parallel global financial system that could be dramatically lower cost, more transparent, and inclusive than today’s financial infrastructure.
But today that financial system is subject to hacks, scams, and an unwieldy on-ramp. We’re tackling all of those issues:
– Instant ACH & card onramp to crypto
– Direct fiat to NFT checkout
– Granular fraud detection & fraud risk liability
– Transaction monitoring to catch Fincrime
Today Brave and Bitski partner with Sardine to offer its customers instant Crypto purchases via ACH with no two-day settlement delay. Sardine has cut its teeth working at the most high-risk end of the financial services spectrum, and now its unique data set and IP allows our clients to offer much better experiences. We can’t wait to announce many more partners in the coming months.
Real-time payments are now a significant part of the wider financial services industry, with Venmo, CashApp, and Zelle making real-time a reality. But with real-time payments comes real-time fraud losses, especially in the form of authorized push payment (APP) fraud. This type of fraud has risen dramatically in the past two years, especially targeting the elderly. Left unchecked, these losses will only grow, and today the consumer is liable, leaving them several thousand dollars out of pocket. Sardine has unique signals that allow us to detect this type of fraud before it happens. For this reason, Sardine has started to partner with financial institutions large and small to prevent and detect APP Fraud.
Together we can upgrade the industry.
To truly understand the risk in this space, we need to understand how attackers arbitrage TradFi and DeFi, and Sardine is uniquely placed to do this with its experience, client base, and data sets. Sardine will help to realize the vision of web3, combining on-chain and off-chain data, analytics, and fraud detection to make web3 safe for everyone.
This data set should benefit the entire industry, not just Sardine clients. So starting in October, we’re making the first of several data packs available to the market who want to use them. We initially envisaged the mix of on-chain and off-chain data being used for Fraud prevention (which we absolutely see), but we’ve also been blown away by our client’s imagination. Imagine using the combination of data for credit underwriting or industry benchmarking.
To achieve the vision of a world where consumers and businesses can use any payment rail instantly and risk-free, we’re also building a data consortium between large financial institutions, Fintech companies, and Crypto. This group has historically not shared data but shares an interest: Reducing fraud.
- Financial institutions have a blindspot in Fintech and Crypto transactions and see everything coming from those businesses as “high risk.” This is creating a poor customer experience but also not eliminating fraud losses.
- Fintech & Crypto wallets see high decline rates, and while they can reduce them, they have no forum to share their data.
Let’s do this.
Our mission at Sardine is to enable safer, faster payments in a seamless experience across financial institutions, fintechs & crypto companies — built on our risk platform.
Sardine will change this. We believe more data sharing = less fraud = more instant payments.
It doesn’t matter where you sit in the industry; we have a shared goal.
Nobody wants more fraud, but reducing it meaningfully means working together. We can’t do this without you.
So we’re excited to meet you and upgrade the industry!