citybiz+ 645 Ventures, General Catalyst Join $3.2M Round for Fintech Accend

Accend, which is building an AI-based platform to ease business onboarding and compliance, has raised $3.2 million in a funding round led by San Francisco-based Adverb Ventures. Other participants include Y Combinator, Cambridge, Mass.-based General Catalyst, New York’s 645 Ventures, and angel investors from fintech companies Brex, Stripe, and Carta.

Targeting Giant Incumbents

The San Mateo, Calif., startup squarely targets companies such as Accenture and others that currently dominate this market, helping fintechs and banks onboard business customers. With AI, Accend has been able to speed up the process, and has won over customers such as Slope, Pleo, Rho and Pliant.

CEO Pranjal Daga, who is based in New York, and Yutong Pei co-founded Accend last year. The two first encountered the challenges of business onboarding and compliance when working for Brex, concluding that AI would be best suited to ease the pains. They later brought aboard Joseph Zhou, who was previously the chief financial officer at a mobile gaming startup, as the third co-founder.

“While the fintech world continues to evolve, the industry remains tethered to manual back-office operations,” Daga, who has BS and MS degrees in computer science, said in a blog post on Tuesday. “The process of conducting due diligence while onboarding a new business onto a fintech or banking platform is currently painstakingly complex, excruciatingly repetitive, and  – as a result –  extremely prone to human error.”

‘Innovation Paradox’

Daga termed the phenomenon a “paradox of innovation,” because true progress was held back by tradition. Accend is geared to disrupt this norm, he added.

In his blog post, Daga cited positive experiences of payments platform Slope and Pleo, two early users of Accend’s technology.

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“With Accend, we were able to not only find significant time savings with over 80% reduction in manual effort required, but also provide a superior experience to our customers,” said Nick Heins, Slope’s head of Capital Markets.

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Pleo, a B2B spend management and credit card provider in Europe, has used Accend’s Know Your Business system to “free our analysts from repetitive manual research, enabling them to focus on quality assurance,” said Dan Jacobson, the company’s head of global business operations. “Our goal at Pleo is to onboard more customers without adding operations headcount,” he added.

Accend, which also eases compliance risks that could potentially lead to huge regulatory fines, is eyeing opportunities in underwriting as well.