UK AI-powered due diligence provider Xapien has raised $56m in a Series B investment round.
The financing was led by software-focused growth equity firm Spectrum Equity, which has extensive experience investing in risk and compliance technology spanning two decades. It was joined by existing investor YFM Equity Partners, which specialises in growth capital for UK SMEs.
Xapien says that it plans to use the fresh capital to increase its US footprint in a market that already generates 50% of its revenue. It will also focus on expanding its Boston office and relocating senior staff, including its CEO.
The company’s AI-powered tech automates due diligence tasks such as investigating corporate backgrounds, searching out relative information and spotting potential issues such as fraud.
Chris Green, CEO of Xapien, said: “Third-party due diligence has remained stubbornly manual for 20 years. 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 organisations the confidence to move at speed.”
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.”
Joel Lange, general manager for risk and enterprise at Dow Jones, a Xapien client, said that for too long compliance teams have had to make choices between the depth of research and the speed of completing a task.”
He added: “Xapien shows that automation can deliver both, helping organisations conduct rigorous due diligence more efficiently and make faster, smarter risk-based decisions.”
The company says it currently has 350 clients across 15 different countries, including Greenberg Traurig, ABB, Dow Jones Risk & Compliance and KPMG.
Currently in a beta phase, the firm is developing Xapien Live – a continuous risk surveillance tool that marks a shift in strategy from one-off background company checks.
The London-based business was co-founded eight years ago by Dan Secretan and Shaun O’Mahony, with Green joining them as CEO in 2022.
It secured $10m in a Series A funding round in July two years ago, led by YFM Equity Partners, which also spearheaded Xapien’s £4.5m seed funding round in 2023, where it was joined by early-stage venture capital fund D2.
Last week, Chilean legal AI platform start-up Magnar secured $8m in a Series A funding round co-led by early-stage investor 6 Degrees Capital alongside Mexican start-up investor Hi Ventures. Other investors included Argentinian law firm Beccar Varela.
Legaltech giant Harvey also secured $550m in fresh capital following its latest funding round, valuing the business at $15.5bn. The financing round was co-led by venture capital firms Diffusion and Lightspeed Venture Partners, both new investors.
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