Flagright secures $12.5m to expand AI compliance

By Milan Rojan

Flagright, the financial crime compliance specialist, has raised $12.5 million in a funding round led by Infinity Ventures, with participation from Sella Direct Ventures and continued backing from existing investors Frontline and Y Combinator.

The company, founded by Baran Ozkan, CAMS, CEO, and Madhu G Nadig, CTO, has said the fresh capital will be used to expand its explainable AI capabilities across investigations, alert intelligence, rule optimisation, decision support and audit-ready workflows. It has also planned to strengthen its US market presence and grow enterprise sales among banks, FinTechs, credit unions and other regulated financial institutions.

Madhu G Nadig, co-founder and CTO 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.”

Flagright has said its AI-powered compliance platform was being used by around 100 FinTech companies and banks across more than 30 countries. The platform has brought transaction monitoring, watchlist screening, investigations and governance into a single audit-ready system.

Its product suite has included sub-second APIs, a scenario builder, dynamic risk profiling, simulation tools and an AI investigation tool designed to reduce false positives and improve decision accuracy. The company has positioned explainable AI as a core part of its offering, arguing that compliance teams need systems that can be trusted, audited and operationalised at scale.

The latest funding has come as financial institutions have continued to invest in automation and AI-driven tools to support compliance operations, reduce manual workloads and improve detection quality. Flagright has said it intends to use the investment to extend its platform and deepen its reach across global regulated markets.