Pushpay Founders Chris Heaslip and Eliot Crowther Endorse First AML’s $ 8 Million Raise

Pushpay founders Chris Heaslip and Eliot Crowther are contributing to support a First AML $ 8 million Series A raise.

Auckland-based startup automates customer verification process, a pain point with anti-money complexes legislation on money laundering.

The round was led by San Francisco-based venture capital firm Bedrock Capital, whose other actions include initial investments in Lyft and Canva. Icehouse Ventures also participated.

It was the second time Heaslip and Seattle-based Crowther were in the well. In October last year, the Pushpay pair led a $ 2.5 million seed round for First AML, then two years old, founded by Milan Cooper, a patent attorney turned Bain consultant and Air NZ strategy manager. , with former corporate bankers. Bion Behdin and Chris Caigou.

It was also Heaslip who introduced Bedrock’s managing partner, Geoff Lewis, to First AML.

Lewis has applied for the Edmund Hillary Fellowship, an effort to bring together 500 “high-impact global entrepreneurs to catalyze New Zealand’s economy and startup community,” and is looking for more opportunities here.

First AML is still in an early stage, with only a few hundred clients, mostly local, though some big names like Grant Thornton, Bayleys, Colliers, Lowndes Jordan, and Blackbird Ventures. Cooper’s goal is to follow in Pushpay’s footsteps and build a software business worth more than a billion dollars.

And he says Heaslip (who is also a director) and Crowther have been hands-on investors, offering advice and mentorship to achieve that goal.

“Being Kiwis who now reside in the US and have brought a business to the world, they are very interested in helping other Kiwi companies achieve the same. They have the mindset to think big and not get stuck on these little ones. markets at the bottom of the world. They are encouraging us to shoot for the stars and go out into the world. “

At the meat and potato level, that means taking part of the $ 8 million and using it to open an office in Sydney as a starting point for a boost in the Australian market. Ten staff members will be hired to cover it. A move to the United States will follow.

The founders of First AML already made a pilgrimage to Seattle, where they met with Heaslip and Crowther last year.

“Eliot and I had the opportunity to share the Pushpay playbook to help them scale the business,” Heaslip tells the Herald.

The new funding will also be used to increase the number of staff from currently 40 to around 60 to “significantly expand our product engineering capabilities,” Cooper says.

The co-founder, who serves as CEO, says First AML could be profitable today, but prefers to bet on growth.

It won’t share financial information, but says the Series A round was oversubscribed despite the pandemic and that some investors were turned away.

Cooper says there is no direct competitor in terms of fully automating every step of the customer due diligence process required by the New Zealand Anti-Money Laundering and Anti-Terrorism Financing Act (2009) and equivalent laws in others. countries in the midst of global repression.

At the local level, there has been a constant stream of prosecutions under the AML / CFT Law, sometimes with heavy penalties.

In 2018, for example, the head of the Auckland finance company, Xiaolan Xiao, lost his challenge to a $ 5.3 million fine imposed by the High Court for failing to follow the strict reporting requirements of the anti-money laundering law, as it did not properly identify some 362 customers who routed the transactions. through your company.

For civil offense violations, individuals can be fined up to $ 200,000 and businesses can be fined up to $ 2 million. Repeated failure to comply with AML / CFT obligations, providing false or misleading information, and other criminal offenses can result in fines of up to $ 5 million for companies. Individuals can be fined up to $ 300,000 or up to two years in prison.

Pain and pain

Punakaiki Fund Director Lance Wiggs has been one of several business leaders who criticized the cost and paperwork associated with AML / CFT compliance.

But for Cooper, the regulatory pain is a win for his company.

“This is a $ 100 billion global market; there is a great opportunity. We are really focused on making things easier for companies that need to meet their AML obligations,” he says.

And like any good new market, it has an agile abbreviation: “reg tech,” Cooper calls it.

Its drivers, perhaps ironically given that it has not invested in First AML, include Australian venture capital team Blackbird Ventures. Their Business Operations Manager Dan Danilov says: “First AML reduced the bottleneck of our AML cases, completely eliminating the burden of collecting and verifying AML documents, with an easy-to-use dashboard that tracks the status of all of our cases. Many of our investors have contacted to let us know how much better the experience is. “

When the Herald checked in this morning, First AML was fixing the biometric identification element of its service.

“We have developed proprietary biometric technology. It involved facial matching between a person and the identification document they have. All of this can be completed on their mobile phone,” says Cooper.

“This allows people to be verified anywhere in the world, rather than having to obtain certified copies of documents.”

A new version of the First AML platform is scheduled this month, which will include improved biometric identification for remote verification and new visual tools to help users understand ownership of complex business structures.