Flagright has raised USD $12.5 million in a Series A funding round led by Infinity Ventures.
Sella Direct Ventures and existing backers Frontline and Y Combinator also participated. Flagright will use the funds to expand in the US market and broaden the use of explainable artificial intelligence across its compliance operations software.
Based in London, Flagright sells financial crime compliance software to banks, fintechs, credit unions and other regulated financial institutions. Its platform combines transaction monitoring, watchlist screening, risk scoring, case management, AI forensics and governance workflows in a single system.
The investment comes as financial institutions face heavier compliance demands, higher transaction volumes, and more complex fraud and money laundering risks. Many still rely on legacy systems or separate tools for monitoring, screening and investigations, adding operational complexity.
Flagright says it serves more than 100 fintechs and banks across more than 30 countries. It positions its software as a unified alternative for institutions looking to replace fragmented compliance infrastructure.
Its products include a no-code scenario builder, dynamic risk profiling and simulation tools, and AI agents designed to support investigations within governed workflows. The system is built to maintain human oversight and auditability while using artificial intelligence to support decision-making.
Baran Ozkan, Co-Founder and Chief Executive Officer of Flagright, outlined the company's view of the market shift.
"The financial crime compliance stack is being rebuilt, and Flagright is the company to define the operating system layer for this category. Regulated financial institutions need a system that gives them speed, control, explainability, and auditability in one place. This round helps us accelerate our position as the enterprise standard for financial crime compliance by expanding explainable AI use cases across compliance operations and increasing our US market presence, while we continue serving sophisticated clients with the reliability and depth they expect from a mission critical software," said Ozkan.
AI and compliance
Compliance technology companies have been pushing to apply artificial intelligence to tasks such as alert review, investigations and rule tuning. That has also raised questions for banks and regulators about transparency, governance and the ability to explain automated recommendations.
Flagright says those concerns are central to its approach and that it focuses on explainable systems rather than black-box tools. It plans to extend AI across investigations, alert intelligence, rule optimisation, decision support and audit-ready workflows.
Madhu Nadig, Co-Founder and Chief Technology Officer of Flagright, said: "AI in compliance only matters if it is explainable, governable, and useful in real operations. The market does not need another black box tool. It needs an operating system that brings monitoring, screening, investigations, governance, and explainable AI together in one place. We are building the system of choice for sophisticated institutions that need AI they can trust, audit, and operationalize at scale."
Investor view
Backing from Infinity Ventures reflects continued investor interest in compliance software, particularly products aimed at regulated financial firms under pressure to modernise internal systems. Spending in the sector has remained resilient as firms seek to manage both regulatory scrutiny and rising fraud risks.
Jeremy Jonker, Co-Founder and Managing Partner of Infinity Ventures, said: "At Infinity Ventures, we back founders building best-in-class modern financial infrastructure. 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. We believe Flagright is defining the AI operating system layer for financial crime compliance, and we expect the company to become the market leader in this category over the next five years."
Flagright says its platform can be deployed in as little as two weeks. It also says organisations replacing fragmented tools with its software have reported up to 93% fewer false positives and 80% lower compliance costs.