The Estonian RegTech Startup, Salv, Combats Money Laundering with Fresh €1.5m Seed Investment

“CEE Star of the Week“ is our weekly series of short stories where we present a company from Central and Eastern Europe that has recently achieved something significant – closed an investment round, won a prize, successfully launched on a new market, made a prominent hire, etc. The stories can be found both on trendingtopics.at and trendingtopics.eu.

Every year millions of people around the world are deceived and cheated out of good lives because of undetected money laundering. The negative impact of money laundering practices is significant – between 2 and 5% of the global GDP, that is between €715b and €1870b, is laundered each year, and the acuteness of the problem demonstrates that just compliance is not enough. To most effective tackle the global financial crime problems, we need to switch our focus from relying on compliance to catching more criminals. But how can financial institutions become real money laundering fighters? 

Salv, the Tallinn-based RegTech startup with an anti-money laundering (AML), crime-fighting platform, has realized that the only way institutions can catch more criminals without the need to hire loads of new employees, is if they are able to share information between them instantly, securely, and compliantly. After Salv introduced a pilot program AML Bridge in Estonia in October 2020 intending to prove the potential of collaborative crime-fighting in the banking sector and to confirm that its Privacy Enhancing technology allows safe and secure data sharing, on the 4th December 2020, the startup raised €1.5m in seed funding to expand its program to other European countries. 

How was the idea of Salv born and who is behind the company?

Having previously worked in the anti-fraud and engineering teams of Skype and TransferWise, the founders of Salv – Taavi Tamkivi, Jeff McClelland, and Sergei Rumjantsev, have a first-hand experience both with fast-growing startups and AML. All three of them were involved in the development of the AML, fraud, and Know Your Customer (KYC) teams at TransferWise and Skype. The co-founding team shares that the insights they have gained while working in the well-known Estonian startups have brought them to the idea of creating Sal and is currently helping them to scale up their business and improve the quality of their product.

What makes the solution of Slav unique and what is the technology behind it? 

The platform of Salv is fully customizable and allows its users to create their own risk rules and define their risk parameters. By using Know Your Customer (KYC) processes of identifying and verifying customer risks, Salv’s solution is able to quickly calculate the risk scores of every customer and transaction. Moreover, the tools that Salv provide are flexible and don’t require any engineering power – they can adapt to the changing business and regulations environment. The platform is also fully GDPR compliant and all the data is protected by encryption. 

What is the mission of Salv and what problems does it solve for its banking and fintech clients? 

The goal of Salv is to create a transformation in the financial sector similar to what happened with virus scanning around 15 years ago when virus scanners on every PC were seen as a mystery and consumed a large number of resources. According to the CEO of Salv, the same is happening with financial institutions today as they are using obsolete software and processes to combat money laundering. The system used by the platform takes about a month to set up and allows its users to translate all the new information from criminal patterns they learn into encoded automated rules that are used in the future to protect banks. So far, among the startup’s customers are – the Estonian bank LHV, one of the biggest players on the local financial market, which is also active in London, and some companies from the Lithuanian fintech ecosystem. 

What is the business model of Salv? 

The B2B platform charges a monthly subscription, the price of which depends on the number of active users that a bank or a fintech has. 

How much has Salv fundraised and who are the major investors? 

The Estonian startup has raised more than €3.2m from venture capital and seed funds such as the ones leading the last round – Fly Ventures, Passion Capital, Seedcamp, as well as from angel investors including the N26 founder Maximilian Tayenthal, Skype co-founder Toivo Annus, and the founder of LHV Bank Rain Lohmus. 

What are some of the biggest challenges that the team of Salv has faced so far?  

Working with the banking and financial sectors, which are often defined as a slow-moving industry, the team of Salv outlines that they need to be patient in their aspirations to disrupt the sector. The RegTech industry, which they are in, is relatively new and they need to bring examples from the past of how revolutionary technologies have changed the world when communicating with potential clients.

What comes next for Salv? 

The team of Salv hopes to expand in Latvia, Lithuania, and the UK and validate its AML Bridge program there. The Estonian Ministry of Finance has stated that it looks forward to seeing the results of the pilot project and that they are open to cooperation for the development of new ways to prevent money laundering and spot related risks.