Xapien funding round raises $56m led by Spectrum Equity

Xapien, the AI due diligence platform, has raised $56m in a growth investment round led by Spectrum Equity, the company announced on Friday. Existing investor YFM Equity Partners also took part.

The company said the money will be used to build out its US presence, which already generates 50 per cent of its revenue. It plans to expand its Boston office and relocate chief executive Chris Green and other senior leaders to the US.

Xapien said its annual recurring revenue has grown by more than 350 per cent over the past 24 months. It now has 350 clients and partners in 15 countries, according to the company, including Greenberg Traurig, ABB, Dow Jones Risk & Compliance and KPMG.

What the platform does

Xapien’s software reads the open web, corporate records, sanctions lists and media in any language, and resolves results against similarly named people and entities. It then produces a sourced and auditable risk report, which the company says takes minutes rather than days.

The company said clients report that 90 per cent of onboarding cases can be fully automated, leaving analyst teams to concentrate on higher risk, complex cases.

A product called Xapien Live, currently in beta, is designed to give companies a continuous view of counterparty risk rather than relying on periodic checks.

Xapien pointed to a gap in how widely businesses check their partners. It said only 30 per cent of organisations report having the bandwidth to assess even half of their business relationships, with budget and time constraints limiting scrutiny to a fraction of counterparties.

“Third-party due diligence has remained stubbornly manual for twenty years,” said Green. “Hence, businesses have had to ration their scrutiny to a subset of relationships with one-off checks at the point of onboarding, leaving them massively exposed. This funding lets Xapien pursue its mission to give compliance, legal, and procurement teams full visibility on every counterparty, all the time, giving organizations the confidence to move at speed.”

Investors and background

Spectrum Equity is a growth equity firm that the announcement said has two decades of experience in risk and compliance technology, including World-Check and Verafin.

Adam Margolin, managing director at Spectrum Equity, said: “Xapien represents a rare opportunity for Spectrum to back a team with deep domain expertise that has been laser focused on harnessing innovative AI technology to transform and automate enhanced due diligence. Xapien is fast emerging as a new standard for counterparty risk management, and we are excited to support Chris, Dan and Shaun in this next stage of growth.”

Xapien was founded in 2018 by Dan Secretan and Shaun O’Mahony. Green joined as chief executive in 2022. All three previously worked in BAE Systems’ financial crime and national security divisions.

The company’s customers include multinational corporations, law firms, private banks, universities and nonprofits, and it also powers automation for professional services firms.

The latest round follows the company’s £8m Series A in 2024, which was led by YFM Equity Partners and took its total funding at the time to £14m. The deal also lands in a year when AI companies accounted for the bulk of the record $17bn raised by UK start-ups in the first half.

Joel Lange, executive vice president and general manager, risk and enterprise at Dow Jones, said: “For too long, compliance teams have had to choose between the depth of their research and the speed at which they need to act. Xapien shows that automation can deliver both, helping organizations conduct rigorous due diligence more efficiently and make faster, smarter risk-based decisions.”

Xapien said its mission is to make its dynamic due diligence the global standard for how organisations manage third-party risk.

About the author

Jamie Young

Jamie Young is Senior Reporter at Business Matters, covering SME finance, employment law and Westminster policy since 2016. He has reported on every Budget and Autumn Statement since 2018, helped make sense of the ‘covid era’ and the bounce-back loan scheme from launch through the fraud investigations, and broke the magazine’s coverage of the 2024 late-payment reforms. He joined Business Matters straight from completing his BA in Administration from Exeter University and is NCTJ-qualified. Reach him at jyoung@cbmeg.co.uk

Advertisement