Data Sutram Secures $9M to Power AI Fraud Detection and Global Reach

Regulatory technology startup Data Sutram has secured $9 million in a Series A funding round. The investment was co-led by global venture capital firms B Capital and Lightspeed, signaling strong investor confidence in the company's AI-powered fraud detection and compliance platform.[1][2][3] This capital injection is earmarked to enhance the company's artificial intelligence capabilities, fuel global expansion, particularly into the Middle East and Southeast Asia, and strengthen its product offerings for the financial services sector and other high-risk industries.[4][3][5] The funding round involved both primary and secondary transactions, allowing some early angel investors to partially exit.[4]

Founded in 2018 by Rajit Bhattacharya, Ankit Das, and Aisik Paul, Data Sutram specializes in leveraging AI and external intelligence from over 250 sources to combat fraud, reduce cybersecurity risks, and ensure regulatory compliance.[4][3][6] The Mumbai-based company initially focused on the banking and lending sectors but is now poised to extend its services to a broader range of industries.[4][2] Its core technology revolves around a proprietary "Trust Score," which analyzes millions of digital footprints in real-time to assess risk and identify potential fraud, such as synthetic identities, collusion, and identity theft.[1][3][7] This platform processes over 110 million individual identities, providing clients with a comprehensive view of customer risk while adhering to privacy regulations.[1][7][5] Data Sutram's solutions are designed to help businesses reduce non-performing assets (NPAs), minimize mule account creation, and improve loan approval rates.[3][6] The company's AI engine employs methodologies like Optical Character Recognition (OCR) and Natural Language Processing (NLP) to process unstructured data, converting it into actionable socio-economic insights for businesses.[8]

The $9 million infusion will be instrumental in several key areas for Data Sutram. A significant portion will be dedicated to further developing its AI-driven platform, enhancing its applications for fraud detection, risk assessment, and collections optimization.[3] This includes strengthening its flagship product, DS Authenticate.[4] The company plans to expand its team, which currently consists of around 65 people, to support its growth.[4] A major strategic push will be the expansion into new high-risk sectors beyond its traditional focus on banking and finance. These include insurance, gaming, cryptocurrency, real-time payments, e-commerce, and quick commerce – industries increasingly vulnerable to sophisticated digital fraud.[4][1][2] Geographically, Data Sutram is targeting expansion into international markets, with a specific focus on the Middle East and Southeast Asia, regions experiencing rapid growth in digital finance.[3][6][5]

This funding round comes at a time when the demand for advanced fraud detection solutions is surging globally. The digitization wave, accelerated by recent global events, has led to a significant increase in digital transactions, account openings, and lending, which in turn has created new avenues for fraudulent activities.[2][6] Traditional fraud detection systems are often struggling to keep pace with the evolving tactics of fraudsters.[6] AI-powered RegTech (Regulatory Technology) solutions like those offered by Data Sutram are becoming increasingly critical for businesses to navigate this complex landscape. The global AI fraud detection market is projected for substantial growth, with some estimates suggesting it could reach nearly $120 billion by 2034.[9][10] Data Sutram claims its technology has already helped clients reduce fraud cases by up to 45%.[4][6] Its client roster includes prominent names such as HDFC Bank, Axis Bank, Tata Capital, and Amazon Pay.[4][6] Despite revenue growth, the company reported an increased net loss in the last fiscal year as it invested in product development and talent, but it aims to reach a breakeven point within the next year.[4][6] This Series A funding brings Data Sutram's total funding to over $15 million, following earlier rounds that included investors like 100X.VC, Indian Angel Network, and IIFL Fintech Fund.[4][6]

The investment by B Capital and Lightspeed underscores the growing importance of AI in mitigating financial crime and ensuring compliance. Investors highlighted Data Sutram's ability to fuse external intelligence with real-time analytics as a key differentiator, positioning it as a potential category leader in India's RegTech space with strong prospects for international replication.[3] The company's focus on providing a "Trust Score" as a new standard for underwriting digital transactions reflects a broader industry shift towards leveraging alternative data and comprehensive digital footprints for more accurate risk assessment.[1][6][11] As businesses and financial institutions worldwide grapple with rising fraud levels and increasing regulatory scrutiny, AI-native solutions that offer intelligent, real-time fraud signals are becoming indispensable.[1][3] Data Sutram's latest funding is a significant step towards its goal of embedding trust and intelligence at the core of every digital transaction.[6][5]