Why we invested in Dotfile?

Article written by Aristotelis Xenofontos and Mary Egan

Market

Financial institutions play a critical role in preventing money laundering and the financing of terrorism, which still represents c.2% of the world’s GDP. They are responsible for conducting business verification, a process also known as “Know-your-business” (KYB), which involves a thorough investigation of a business’ identity, structure, and ownership.?

This process is demanding and laborious, and becoming increasingly complex. In a market research study conducted by Seaya Ventures of 20 financial institutions in France & the UK, all survey respondents believe ‘compliance is becoming more important within their organization’. More companies are also being held accountable for KYB due to stricter regulatory pushes. The consequence is that compliance teams across different types of financial institutions face a number of pain points, and the consequences extend far beyond only team resources and time. In the market research conducted by Seaya Ventures, respondents ranked the three most relevant pain points as 1. slowing down client conversion time 2. negative impact on customer experience 3. concerns on the quality of the data.

Technology platforms have long existed to try to address the pain points, and there is an established willingness to pay for outsourced solutions. We estimate the TAM in Europe alone for KYB 3rd party platforms is €1.5B. However, these legacy solutions still leave significant pain points, and the market is yearning for further disruption by better leveraging technology and AI.

Dotfile’s value proposition

Dotfile ’s mission is to build the trust infrastructure of business relationships, by leveraging AI to give clients a solution that verifies their customers or partners faster, reduces risk, and protects themselves from regulatory fraud.

AI is core to Dotfile’s ability to aggregate dozens of different data sources to paint a complete picture of a business anywhere in the world in 10 seconds. The platform consists of i) a data & an app store that enables the collection and analysis of data from external & internal sources, ii) analysis to enhance and validate the data collected, iii) a workflow solution to manage KYB operations, and iv) an end-client portal for businesses to manage the information they provide to the financial institutions.

The value proposition provides clients with an end to end solution that is more robust, automated and easy to use, which is clearly resonating with the market - after being founded in 2021, Dotfile serves more than 50 customers across 10 countries, including private equity firms, banks, and fintech leaders such as Spendesk, Younited Credit, Flowdesk, and Keyrock

Seaya’s thesis & next phase of growth

We have been watching the compliance and KYB space very closely for 10+ years from an operational and investment angle, and have identified it as an area where AI can be transformational in meeting client needs. Through our 17 financial services investments across 10 countries, we see the opportunity for an innovative disruptor to scale internationally. Having assessed 20+ products we believe Dotfile will be the category leader given their innovative, AI-first, approach and impressive pace of product development.?

Additionally, at Seaya we have strong conviction in data economy businesses. Data is key in the era of Artificial Intelligence (AI), as it serves as the foundation upon which AI models are built, enabling machines to learn, adapt, and predict and generate outcomes. Any technology platform capable of collecting, cleaning, combining and understanding vast amounts of data has unique value in the current Tech and AI landscape. We have backed AI data businesses across sectors (e.g. Clarity AI in ESG data and Shalion in retail media data), and believe Dotfile has a huge opportunity to become the leader in business information and compliance data.?

We are proud to lead Dotfile’s €6M funding round, along with existing investors Serena Capital and Hexa (fka eFounders). Founders Vasco Alexandre and Titouan BENOIT have impressed us with their thought leadership in the KYB space, stellar execution and culture of innovation. We are excited to see all they achieve in Dotfile’s next phase of growth as it becomes an international category leader!