Wayne-based QuantaVerse, which uses artificial intelligence and machine learning to detect financial crimes for more than two dozen global banks and fintechs, has been acquired by Cleveland’s AML RightSource.
Financial terms of the deal were not disclosed.
Founded in 2014, QuantaVerse uses advanced data science to automate and improve financial crime identification, alert investigations and the documentation of investigation results. The company said its platform reduces financial crime risk by identifying patterns and discerning anomalies that are often missed and increases efficiency by reducing false positives while speeding investigations. QuantaVerse gained international attention in 2018 when a documentary from The Economist showed how its software was used to help track down human traffickers.
Founder and CEO David McLaughlin said the company’s client base largely includes banks and fintechs in the U.S. and abroad. In 2018, it signed a three-year agreement with Banco de Credito e Inversiones (Bci), the largest Chilean bank operating in the United States. And in late 2020, it added Cathay Bank, a California-based Chinese-American bank.
QuantaVerse has doubled its client base to over two dozen since 2018. In teaming with AML RightSource, the company with just 12 employees becomes part of one with more than 2,400 all over the world — giving it an international reach and the ability to outsource to hundreds of AML RightSource customers.
AML RightSource is a professional services firm specializing solely in Anti-Money Laundering (AML)/Bank Secrecy Act (BSA) and financial crimes compliance needs. McLaughlin said AML RightSource was looking for a strong technology component. Last September it partnered with Connecticut-based private equity firm Gridiron Capital and has been on a shopping spree. QuantaVerse is its fifth acquisition this year, following Vantage GRC Solutions, London-based Arachnys Information Services, Hamburg, Germany-based Passcon GmbH and Hong Kong-based Blue Umbrella.
“They are the premier company in the managed services space,” McLaughlin said. “They needed our technology. They sought us out. I wasn’t looking to sell but we had such a good conversation and there was a strategic and cultural fit. So we continued the conversation. And I felt good about how this would impact investors and employees and feel like it is a home run for clients.”
AML RightSource CEO Frank Ewing said in a statement that the QuantaVerse deal diversifies the company services and accelerates its strategy to offer more tech-enabled services to support our clients.
After a serving as a pilot in the U.S. Navy from 1986 to 1993, where he won a Distinguished Flying Cross for his service in the Persian Gulf, McLaughlin spent 21 years at SEI Investments (NASDAQ: SEIC), working his way up from a sales role to managing director of community and regional bank market unit and then managing director of wealth management services. He left the Oaks-based fintech to serve short stints as an executive at NES Financial and IPR International before deciding to start his own company.
QuantaVerse raised $1 million in a Series A funding in early 2016 and an additional $1.7 million in follow-on funding by 2018. In total, the company raised about $6.5 million in equity and debt.
McLaughlin said his role at AML RightSource has not been defined but he will be staying on board as an executive.
