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Thursday, 17 September 2020 09:30

NZ anti-money laundering firm raises US$7.3m in Series A round

NZ anti-money laundering firm raises US$7.3m in Series A round Image by mohamed Hassan from Pixabay

Auckland-based anti-money laundering firm First AML has raised US$7.3 million (A$ 9.99 million) in a Series A funding round led by the American firm Bedrock Capital, and supported by its existing investors, Pushpay founder Chris Heaslip and Icehouse Ventures.

First AML said in a statement that its software could check compliance with laws for financial service providers, law firms, real estate agencies and accountants. Due diligence could be carried out on customers in order to minimise the risk of money laundering.

Bedrock Capital managing partner Geoff Lewis, who is making the company's first APAC investment, said: “Bedrock is delighted to lead one of the largest Series A financing rounds in New Zealand for First AML.

“The company has built a unique technology solution that is upending profoundly antiquated AML compliance processes, while also delivering dramatic efficiency improvements and cost savings to customers. Led by a talented management team, we believe First AML is positioned for global impact over many years to come.”

First AML co-founder Milan Cooper said the new investment would allow the company to speed up its global market expansion and expand its product development.

"Interest from customers in countries like Australia and the US is heating up as businesses look to prepare for the new regulatory requirements, and we are now well placed to capture these opportunities and offer the world’s best AML compliance platform thanks to our new investment partners at Bedrock. This is a US$184 billion global market - there's massive opportunity out there.”

first aml staff

First AML co-founders Milan Cooper, Bion Behdin and Chris Caigou. Supplied

Australia has often been criticised for having weak laws to guard against money laundering. The Anti-Money Laundering and CounterTerrorism Financing Act 2006 does not cover real estate agents, lawyers or accountants. The Federal Government discussed a second tranche of AML laws in 2008, 2010, 2012, 2014 and 2017 but legislation is yet to be passed.

A report by Transparency International in 2017 said Australia, the US, the UK and Canada were the top four places targeted by corrupt officials or criminals for real estate crime. It said: "Australia has severe deficiencies under all 10 areas identified in the research and is therefore not in line with any of the commitments to tackle corruption and money laundering in real estate made in international forums."

The 10 areas identified were: inadequate coverage of anti-money laundering provision; identification of the beneficial owners of legal entities, trusts and other legal arrangements is still not the norm; foreign companies have access to the real estate market with few requirements or checks; over-reliance on due diligence checks by financial institutions leads to cash transactions going unnoticed; insufficient rules on suspicious transaction reports and weak implementation; weak or no checks on politically exposed persons and their associates; limited control over professionals who can engage in real estate transactions: no 'fit and proper' test; limited understanding of, and action on, money laundering risks in the sector; inconsistent supervision; and lack of sanctions.

First AML said under the current Australian laws there were 15,000 reporting entities and this would exceed 100,000 under a second tranche when AML would become mandatory for lawyers, accountants and real estate agents.

The company said it was looking to hire 10 new staff in Sydney; it has 40 employees in Auckland.

Cooper founded First AML in 2017 with his two co-founders, Bion Behdin and Chris Caigou, who were working as corporate bankers when the first phase of AML regulations was introduced for banks in 2013.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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