Flagright Secures $12.5 Million to Expand Financial Crime Compliance

Flagright raised $12.5 million in a Series A funding round to increase the capabilities and adoption of its artificial intelligence operating system for financial crime compliance.

The company will use the new funding to expand explainable AI uses cases across investigations, alert intelligence, rule optimization, decision support and audit-ready workflows, it said in a Wednesday (June 17) press release emailed to PYMNTS.

Flagright will also use the funding to increase its presence in the U.S. market by reaching banks, FinTechs, credit unions and regulated financial institutions that are looking to replace legacy compliance infrastructure, according to the release.

The company’s system brings together transaction monitoring, watchlist screening, risk scoring, case management, AI forensics and governance workflows.

It provides an alternative to legacy systems and fragmented point solutions that were not built for the current environment that includes higher volumes, rising regulatory expectations and increasingly sophisticated financial crime, per the release.

“The financial crime compliance stack is being rebuilt, and Flagright is the company to define the operating system layer for this category,” Flagright Co-Founder and CEO Baran Ozkan said in the release. “Regulated financial institutions need a system that gives them speed, control, explainability and auditability in one place.”

Flagright Co-Founder and Chief Technology Officer Madhu Nadig said in the release: “We are building the system of choice for sophisticated institutions that need AI they can trust, audit and operationalize at scale.”

The company’s platform provides the explainability that organizations need to secure in the shift to AI, Ozkan told PYMNTS in an interview posted Monday (June 15).

“If you think about LLMs [large language models], they are inherently unexplainable,” Ozkan said. “In a regulated environment, everything needs to be explainable.”

It also provides AI forensics in the form of specialized AI agents that perform investigator tasks across anti-money laundering compliance and fraud prevention, Nadig told PYMNTS in an interview posted in March.

“You can think of them as digital investigators that follow your institution’s standard operating procedures exactly the same way your analysts follow them, but they can execute them autonomously at scale and in a few seconds,” Nadig said.

Flagright’s Series A followed a September 2023 pre-seed round in which it raised $2.8 million and an April 2025 seed round in which it secured $4.3 million.

Today, the company’s platform is used by more than 100 FinTechs and banks across 30 countries, and compared to fragmented tools, delivers up to 93% fewer false positives and 80% lower compliance costs, according to the Wednesday press release.

The company’s latest funding round was led by Infinity Ventures.

“At Infinity Ventures, we back founders building best-in-class modern financial infrastructure,” Jeremy Jonker, co-founder and managing partner at Infinity Ventures, said in the release. “Flagright stood out because sophisticated financial institutions are increasingly choosing the platform for its combination of enterprise readiness, explainable AI, operational flexibility and product maturity.”