Owl.co, a software company that helps banks and insurers collect and encrypt customer data, has raised its first round of funding, securing $2.6 million CAD.
The seed round was led by two FinTech-focused firms, Luge Capital and Impression Ventures, and saw participation from San Francisco-based Sway Ventures, Inovia Capital, Plug and Play, and Builders VC, a US-based firm focused on “modernizing antiquated industries.”
“We’ve been able to grow much faster than a lot of other startups in the space only because of the technology that we built.”
Started in 2018, Owl has found quick success having developed AI-enabled end-to-end encrypted platform that help banks and insurance companies handle critical processes around customer data collection. Since launching in mid-2018, the startup, which began out of Vancouver, has participated in Montreal’s Holt FinTech Accelerator, opened a Toronto office, won an award, and with its new capital is ready to expand globally.
Co-founder and chief operating officer of Owl Vahid Mirjalili told BetaKit that a turning point for the company was being named one of the winners of Finance Montréal’s FinTech Startup Pitch Contest (and receiving $25,000), in October.
“The journey really started from that conference, when Sean [Merat, CEO] pitched to around 2000 people,” Mirjalili said. “After that we had a flow of investors coming to us and pitching to us … and that’s how the whole process got started.”
A few pitches and trips to Silicon Valley later, and Owl, which had originally set out to raise just $1.5 million, was able to garner a $2.6 million, oversubscribed round.
Owl was founded by Sean Merat and Mirjalili, as well as Sean’s brother Sohrab Merat, currently chief product officer. Sean told BetaKit that the idea for the company came out of the desire to improve processes for highly regulated industries like finance and insurance.
The startup has developed three proprietary solutions that automatically aggregate data from the user interfaces of financial institution and then offer real-time insights. The products automate onboarding processes, offer instant AML (Anti-Money Laundering) and identification of client data through KYC (Know Your Customer), as well as fraud detection.
Owl is already working with Canadian financial institutions like TMX, La Capitale, Fairestone, and Fintech Koho, as well as insurance provider IA Financial Group. A key part of its seed round, however, involved plans to begin working with customers internationally.
“The market that we are in – especially the KYC and AML – is a relatively global market. With all the banks, all the money movement, those [KYC and AML] checks need to happen; and especially with the volumes that come in the US market and the international market, it makes sense,” Sean stated, pointing to the US as well as Europe as Owl’s key markets.
One key aspect that Sean feels will set Owl apart from competitors in the space is the procurement process.
“We’ve been able to grow much faster than a lot of other startups in the space only because of the technology that we built, and the funding, allows us to fly through procurement,” he told BetaKit. “Where you have other startups get killed in procurement [processes], sometimes taking months and months and months … we can fly through them.”
The CEO explained that because Owl’s solutions encrypt data right on the user interface, when customers input personal data, its processes are more secure compared to other solutions. With major financial institutions facing data and security concerns as of late (Capital One’s major data breach, for example) Sean noted that Owl never even sees personalized data, doesn’t store it, and there are no cross border transmissions of said data.
“[We] encrypt data on user interface before the data goes to any servers and the data doesn’t even go to our servers, it goes to the bank’s servers,” he explained “Even if comes to our servers – because its all encrypted – if [it was] hacked, you would just have a bunch of encrypted data that you can’t see or use.”
Currently a team of 15, with developers in Vancouver and sales and operations in Toronto, Owl has also used the seed capital to build out its team, recently bringing on senior sales and marketing leads, as well as senior developers.
Image courtesy TechTO