Data Sutram Bags $9 Mn To Offer Fraud Detection Services To BFSI Sector

BFSI-focussed B2B SaaS startup Data Sutram has raised a Series A funding of $9 Mn (around INR 77 Cr) co-led by Lightspeed Venture Partners and B Capital.

The round was a mix of primary and secondary deals.

Without disclosing the names, Data Sutram’s founder and chief executive Rajit Bhattacharya told Inc42 that some of the early angel backers have also partially exited in the current fundraise.

The Kolkata-based startup plans to use the fresh capital to strengthen its fraud detection tool. Additionally, it aims to cater to a wider high risk industries, including cryptocurrency, real-time payments, gaming, e-commerce, quick commerce and insurance.

Earlier, the company was only focussed on the banking and lending sectors.

Data Sutram, with a current workforce of around 65 people, also aims to expand its headcount.

“This investment will allow us to enhance our product offering, scale our customer base, and strengthen our presence globally to serve more institutions and businesses around the world,” said Bhattacharya.

There has been a growing number of fraud cases pertaining to mule accounts in the banking sector. And the count of non-performing assets in NBFCs has also reached an alarming state.

Recognising these issues, three college friends, Bhattacharya, Ankit Das and Aisik Paul founded Data Sutram in 2018 to offer risk and fraud detection services to the BFSI sector in the country.

With the help of its flagship product DS Authenticate, the startup safeguards customer onboarding and also provides ‘Trust Score’ to banking and financial institutions.

Backed with its data collected from more than 250 sources, Data Sutram’s AI-powered tool flags any fraudulent activity for its clients while opening accounts or dispersing loans.

Besides, the startup also has other suits of products namely DS Find, DS Markets and DS Collect which helps in customer acquisition, provides better market insights and builds cross selling and upselling opportunities respectively.

The IIFL-backed startup claims to have reduced the number of fraud cases for its clients by 45%. It includes the likes of HDFC Bank, Axis Bank, Tata Capital and Amazon Pay among others as part of the clientele.

Data Sutram last raised $3 Mn back in 2023 led by Bharat Fund. It has raised a total funding of more than $15 Mn till date and counts the likes of 100X.VC, Indian Angel Network and IIFL Fintech Fund among its backers.

On the financial front, the startup’s standalone operating revenue jumped almost 23% to INR 5.4 Cr in the financial year ended March 31, 2024 (FY24), from INR 4.4 Cr in the previous fiscal year, as per Tofler.

However, Data Sutram more than doubled its net loss to INR 10.83 Cr during the period under review from INR 4.75 Cr in FY23.

Bhattacharya claimed that the startup has managed to reduce its growing loss in FY25 and aims to hit a breakeven point in the next one year.

According to ‘Indian Tech Startup Funding Report 2024,’ last year SaaS startups in India raised $2.1 Bn in funding, a 31% YoY jump as investors are rushing towards backing AI-driven SaaS startups. Besides, India’s SaaS market is projected to grow at a fast rate.

According to Inc42’s Decoding India’s SaaS Startup Ecosystem report, India’s SaaS market will become a 70 Bn opportunity by 2030.