Paris-based regtech Dotfile raises €6 million to automate compliance with AI

Dotfilea French regtech company created in 2021 within the startup studio Hexa (fka eFounders), announced a €6 million fundraising, just over a year after a first round of €2.5 million. This new round is led by Seaya Ventures, with the participation of existing investors Serena and Hexa.

Dotfile’s compliance one-stop shop platform uses AI to help financial institutions automate customer onboarding and comply with Anti-Money Laundering regulations. The company is a leader in business verification, a process also known as “Know-your-Business” (KYB), which is notoriously manual, complex, and expensive to run. It does so by aggregating dozens of different data sources to paint a complete picture of a business anywhere in the world in 10 seconds.

“More than $200 billion is invested in compliance every year, yet 2% of the world GDP is still going through the money-laundering rinse cycle, which is fueling crime. “AI could change how effective those policies are and the positive impact for our societies could be massive,” said Dotfile’s CEO, Vasco Alexandre.

Fintech and crypto companies are under increased scrutiny from regulators while the financial services industry is looking at AI and automation to be more efficient and modernize compliance procedures. These factors have accelerated Dotfile’s growth and sparked investors’ interest. Dotfile has more than 50 customers across 10 countries, including private equity firms, banks, and fintech leaders such as Spendesk, Younited Credit, Flowdesk, and Keyrock.

This fundraising will fuel the company’s R&D efforts and international expansion strategy. After opening an office in London in June, the company eyes other key financial centers for expansion.

“Compliance is costing banks up to 10% of their revenue, 1 out of 4 employees work in a compliance-related position and existing systems are sometimes more than a decade old. “With the competition from fintech intensifying, a transition is bound to happen and generative AI is the tipping point,” added Alexandre.

Aristotelis Xenofontos, Partner at Seaya, commented: “We have been watching the KYC (Know Your Customer) and KYB (Know Your Business) space very closely for over a decade, both from an operational and investment perspective. We have identified this area as one where AI can be transformational meeting client needs. After evaluating more than 20 products and teams in the market, we found in Dotfile the first truly innovative AI solution, combining an unusual deep understanding of the KYB/KYC sector with stellar execution.”

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