TechCrunch | Anita Ramaswamy | Sep 20, 2022

Sardine announced it has raised $51.5 million in a Series B round led by Andreessen Horowitz’s (a16z) Growth Fund after closing $19.5 million for its Series A earlier this year.  “Faster instant payments mean faster fraud,” Sardine CEO and co-founder Soups Ranjan told TechCrunch. That’s the thesis behind his startup, which uses behavioral, financial and device-specific user data to detect fraud on behalf of its clients in the crypto and fintech industries.

• Growth: Sardine has grown considerably since it announced the Series A back in February, growing its roster of clients from ~50 to ~135 today, Ranjan said. Its customers include crypto exchanges FTX and Blockchain.com as well as fintechs with broader mandates such as Wealthsimple and Digit, he added.

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• Differentiators:
  • Sardine’s differentiation in the market as stemming from his team’s experience and the company’s focus on fintechs.
  • Another major differentiator from competitors like Socure is its instant ACH and card onramp to crypto, which allows its customers to purchase over 30 different crypto assets instantly.
    • Banks and card issuers typically use fraud detection algorithms for crypto that aren’t nearly granular enough.  Around half of the customers who attempt to transact using fiat-to-crypto onramps through traditional platforms are declined as fraudulent.
  • It also offers direct fiat to NFT checkout in partnership with Tom Brady’s company, Autograph, and plans to expand that product to other NFT marketplaces, according to Ranjan.
• Competition: Sardine does have competition from other startups in the identity-verification space, such as Socure, which told TechCrunch last year that it counts three of the top five global banks as customers.

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Soups Ranjan, CEO and co-founder Sardine:

One of the reasons why folks haven’t dabbled or launched ACH to crypto, or even direct ACH to NFT, has been that there is no one [else] taking on the fraud risk liability.  The platform allows customers to access some, but not all, of their crypto instantly.  Sardine is taking on the fraud risk. [The transaction] typically settles into two-plus days, so for that period of time, we’re taking on the settlement risk, and we’re taking on the third-party fraud risk, as in, if somebody connects a stolen bank account.

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