Toronto and Florida-based FinTech company PitchPoint Solutions has secured $4.5 million in financing from CIBC Innovation Banking for its software service, which aims to prevent fraud.
PitchPoint’s data and analytics software provides fraud prevention services across the United States (US) for a variety of industries, including the mortgage, background and tenant screening, and anti-money laundering sectors. To date, PitchPoint told BetaKit it has raised approximately $11 million in funding.
PitchPoint plans to use the new growth capital facility to acquire more customers.
PitchPoint plans to use the new growth capital facility to support working capital and give itself the balance sheet necessary to acquire more customers. In the short-term, PitchPoint told BetaKit that it aims to attract one or two mid-to-large sized customers in the US and “continue to drive up gross direct margin to the SaaS level.”
The software company, which was founded in 2003 in Toronto, serves lenders and creditors, allowing lenders to detect and mitigate the risk of fraud while ensuring compliance with investor guidelines and business processes, and enabling creditors to validate loan application data to reduce the risk of fraudulent loan applications.
PitchPoint said it is “one of four players in the market that are recognized to perform fraud verification that is acceptable to investors of mortgages, hence a natural barrier to entry to this space.” The firm claims that its heuristic, rule-based data collation, analysis, and expert service “stamps out 99 percent of fraud alerts while eliminating 100 percent of lost underwriting time.”
“We refinanced venture debt that was three times more expensive because the company finally had the traction to attract more mature debt financing,” PitchPoint told Betakit, adding that this follows “the normal trajectory of early-stage companies achieving planned goals.”
PitchPoint’s head office, which hosts its senior management team and tech developers, is located in Toronto, while its office in Sarasota, Florida houses its sales, customer support, and processing teams. The company currently has 43 staff, including 22 in Canada and 21 in the US.
“We are committed to providing a product that continues to evolve and support creditors of all types across the US,” said Stephen Schrump, PitchPoint’s CEO. “We look forward to working with CIBC Innovation Banking as we continue to grow our business.”
Paul McKinlay, managing director in CIBC Innovation Banking’s Toronto office, noted PitchPoint has a “very strong competitive positioning” in the US fraud verification market.
CIBC Innovation Banking provides strategic advice, cash management, and funding to innovative North American companies from the startup to initial public offering (IPO) stage. Some of its recent investments include Vena Solutions, AlayaCare, and Q4 Inc.
In 2014, PitchPoint raised $2.8 million in financing from BEST Funds. Back then, the company deployed web-based automation solutions for the financial sector that allowed clients to streamline data entry and validate public records data.