ThetaRay's ARR increases 2.5X YOY to $8.93M
Customers grow 6X YOY including Payoneer, Travelex
- Cutting-edge AI-based anti-money laundering software for major financial institutions detects sophisticated financial crimes
- SaaS based transaction monitoring solution for global payments, helps banks, FinTechs and regulators to accelerate their business growth, meet regulatory KYC requirements, minimizing burden and inconvenience to innocent customers by sharply reducing false positives
- Impressive 2.5X YOY ARR growth to $8.93M at end Q2 2022, 6X YOY growth in number of customers; forecasting 3X YOY ARR growth to $15.4M by end 2022; 100% retention rate among cross-border payments clients; 144% net dollar retention; 90% gross margin
- Customers include 3 of 12 largest correspondent banks outside China, Travelex, Payoneer, two Tier-1 UAE banks, multibillion-dollar US fintech; 10 new contracts signed in Q2
- Granted license to operate in UAE DIFC, opened Dubai office
- $12M SAFE with 20% discount and cap of $93M vs. post-money value of $87M at end 2020 despite 2.5X rise in ARR since then helped by effectiveness vs. Russian sanction-busting, possibility of Preferred Bonus Shares subject to SAFE conditions
"We were very happy and surprised with the results from ThetaRay" – Micheal Sheehy, CPO, Payoneer
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Dear Josb,
The Ukraine crisis and accompanying economic sanctions on Russia are pushing banks and FinTechs to ensure they have effective solutions to conduct their global cross-border payments business with confidence that it is not being manipulated to circumvent sanctions.
OurCrowd is reinvesting in ThetaRay, a rapidly growing Israeli company that has developed and deployed a proprietary, state-of-the-art, AI-driven SaaS platform that provides banks and FinTechs with superior AML capabilities that allows them to accelerate business growth. The details in this email are based on information received from, and verified solely by, the company.
The Problem
Cross-border payment volume, already valued at $37T, is growing swiftly, driven by an acceleration in digital platforms. Undetected financial crime is rampant, preventing new business relationships and revenue growth.
The Solution
ThetaRay is on a mission to establish a new standard of trust in the global payment ecosystem by creating a secure financial network connecting people and businesses everywhere. The company's SONAR transaction monitoring solution, based on "artificial intelligence intuition," allows banks and FinTechs to expand their business opportunities through safe and reliable cross-border payments.
Using AI intuition based on proprietary algorithms, SONAR analyzes dozens of risk indicators associated with financial crimes. This unique approach paints a clear picture for compliance teams to detect and pinpoint transactions indicating suspicious activities. As a result, SONAR can deliver up to 95% investigation-worthy alerts, whereas legacy solutions typically have a 99.5% false-positive rate which equates to one true positive for every 200 alerts. In addition, these legacy rules-based solutions require months to be configured and deployed, while SONAR's solution can be ready for deployment within days.
The Traction
Since OurCrowd's last investment, ThetaRay has shown impressive growth. ARR rose 2.5X YOY to $8.93M as of the end of Q2 2022. The company forecasts 3X YOY increase in ARR to $15.4M by the end of 2022. Growth has been driven by a 6X increase in the number of customers YOY, with net dollar retention of 144% and zero churn from any cross-border payments clients. The company enjoys a 90% gross margin from its license and subscription revenues.
The company signed 10 new contracts during Q2. Its customers include Travelex, Payoneer, a Tier-1 UAE bank, a multibillion-dollar US fintech, and 3 of the 12 largest correspondent banks outside China.
ThetaRay opened an office in Dubai after it was granted a license to operate in the Dubai International Financial Center by the local regulatory authorities.
The Round
ThetaRay is raising a $12M SAFE at a 20% discount with a cap of $93M. This represents excellent value: ThetaRay's last round in December 2020 had a post-money valuation of $87M, and the company has had excellent traction since then, including a 2.5X YOY rise in ARR boosted by the company's ability to help financial institutions detect Russian efforts to evade sanctions.
If the company raises an aggregate amount lower than $10M under this SAFE, investors who commit to invest their share under the SAFE before July 26th, 2022 will be granted additional Preferred Bonus Shares for no additional consideration. OurCrowd and its affiliate entities have already committed to invest its share, such that any additional investment brought by OurCrowd before July 26th, 2022 will benefit from the bonus shares in the event that the company raises an aggregate amount lower than $10M under this SAFE. The issuance of the bonus shares is subject to the terms of the SAFE.
Meet the CEO
Watch an investor briefing with investor briefing with CEO Mark Gazit and learn more about ThetaRay.
The ThetaRay Solution
ThetaRay's SONAR transaction monitoring solution is a packaged, cloud-native solution for banks, payment FinTech companies, and regulators to easily launch next-gen AI based payment transaction monitoring and screening to efficiently detect and prevent money-laundering and other financial crimes.
ThetaRay's proprietary AI significantly enhances risk coverage and operational efficiency while meeting regulatory standards, resulting in higher revenues and improved customer service.
Using AI intuition based on proprietary algorithms, SONAR analyzes dozens of risk indicators associated with financial crimes. This unique approach paints a clear picture for compliance teams to detect and pinpoint transactions indicating suspicious activities. As a result, SONAR can deliver up to 95% investigation-worthy alerts, whereas legacy solutions typically have a 99.5% false positive rate which, as mentioned above, equates to one true positive for every 200 alerts. In addition, these legacy rules-based solutions require months to be configured and deployed, while SONAR's solution can be ready for deployment within days.
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