Risk Management Startup Effectiv Raises $4M Seed Funding

Risk management startup Effectiv raised $4 million in a seed funding round led by Accel and REV, according to a press release emailed to PYMNTS on Tuesday (March 29).

Offering a next-generation, no-code risk management platform for mid-sized banks, credit unions, FinTechs and financial institutions, Effectiv’s solutions are powered by artificial intelligence (AI). Its intuitive interface aims to significantly lower costs associated with fraud and risk and enables its users to quickly adapt to the latest trends.

“Dialogues with industry experts from banks, credit unions, combined with our team’s decades of experience in this space, helped us validate the gap that we saw in the market,” said Ravi Sandepudi , co-founder and CEO of Effectiv.

“Cutting-edge technologies that drive Effectiv have so far been prohibitively expensive and were designed for and by large organizations. Effectiv aims to change that and truly democratize AI-driven risk management, making it accessible to any financial institution. Every organization, regardless of size, should have access to best-in-class safety measures to protect their members and customers,” Sandepudi said.

Related: A Connected Economy Requires Connected Risk Management

The fresh infusion of capital will be used to advance Effectiv’s technology, expand its workforce and widen its marketing scope. The startup onboarded its first client in June 2021 and has processed more than $1 billion in loan volume, according to the release.

Co-founded in 2021 by Sandepudi, president Ritesh Arora , Anupam Tarsauliya and product head Jonathan Doering and headquartered in Silicon Valley, Effectiv’s platform is now live following its successful closed beta. The company recently added Bob Stock as an advisor and Mike Persichini to lead sales as the company starts planning its expansion to the U.S.

Effectiv’s founders were all part of an early team at Simility, an enterprise fraud prevention company that was acquired by PayPal in 2018. At Simility and PayPal, the four worked together building solutions for organizations like US Bank, Discover, Synchrony and millions of PayPal merchants, according to the release.

With over four decades of combined experience, they realized that much of what they were building was often out of reach to smaller financial institutions.

“We are building a platform that is designed from the ground up to be extremely easy to integrate and implement. Effectiv comes integrated with best-in-class data services, and our proprietary AI decides when to optimally use (and pay for) a data signal. Our goal is to help teams manage their risk strategies without relying on developers,” said Arora.