Sphinx raises $7.1m to expand AI-powered compliance agents

Identity checks were once reliant on human eyes and human discernment, but making sure people and entities are who they claim they are is receiving founder interest.

Sphinx, a startup developing automated compliance tools for financial institutions, has raised $7.1 million in seed funding. The funding round was led by Cherry Ventures, with participation from Y Combinator, Rebel Fund, Deel Ventures and Singularity Capital.

“Sphinx isn’t just a software,” says Filip Dames, founding partner at Cherry Ventures. “It’s critical operational infrastructure that meets teams where they are: in their systems, procedures, and day-to-day reality.”

Sphinx builds what it calls browser-native “compliance agents,” which perform tasks traditionally handled by human analysts in anti-money laundering (AML), know-your-customer (KYC) and know-your-business (KYB) checks.

Sphinx’s agents operate within existing systems such as case management tools, portals, PDFs and email. The start-up says new dashboards or integrations are not needed, separating the system from earlier regulatory technology platforms.

“Compliance today is mostly human glue between systems that were never designed to work together,” says Alexandre Berkovic, co-founder and CEO. “Sphinx takes on that work directly so analysts can focus on the judgement calls — and institutions finally get a complete, defensible record of how every decision was made.”

The start-up’s agents review alerts and conduct identity checks. They gather supporting documentation, draft requests for information and record their reasoning in regulator-ready audit trails. “Very few products can function inside that level of complexity,” says Dames. “That’s what’s driving such rapid adoption across banks and fintechs.”

The aim is to reduce manual review work, clear backlogs and lower compliance costs for banks and fintechs. Equals Money, a client of Sphinx, said it saw a 94 percent decrease in false positives and that it spotted more true positives, while others report the capability to expand business without the need to increase headcount.

Founded by Alexandre Berkovic and Chrisjan Wüst, who is CTO, Sphinx says it has already processed millions of alerts and hundreds of thousands of cases in production. Wüst previously built AML and onboarding infrastructure for over 15 million users as the first employee at RelyComply. Berkovic focused on AI research at colleges in Imperial and MIT. This is the founders’ second company together, following a prior exit.

The Digital Identity Verification Market Report and Buyers Guide from Biometric Update and Goode Intelligence details significant trends, technologies and considerations for organizations considering digital identity verification solutions.

Article Topics

AI agents  |  AML  |  digital identity  |  funding  |  identity verification  |  investment  |  KYB  |  KYC  |  Sphinx  |  startup