This is the best time ever to build companies
While trillions of dollars are laundered annually, less than 3% of criminals are ever caught. The key to combating the crime, says Charles, was uncovering the links.
Charles Delingpole is the founder and CEO at ComplyAdvantage, which aims to tackle financial crime through artificial intelligence and machine learning.
Sadly, financial crime has become a lucrative and relatively low-risk business. While trillions of dollars are laundered annually, less than 3% of criminals are ever caught. Charles Delingpole saw the potential for machine learning and artificial intelligence in tackling money laundering, terrorism financing and corruption. ComplyAdvantage, founded in 2014, has now raised £100m.
ComplyAdvantage provides the world’s only dynamic global risk database of people and companies. It is designed to help automate and ease the burden of complying with regulations on sanctions, anti-money laundering and combating the financing of terrorism. Charles began with six people in his garage, plus a couple of sales guys in his living room. Today, the business operates in eight countries, with a 300-strong workforce.
The key, says Charles, was uncovering the links. One company may look fine, but do they link to another that is implicated in child trafficking? He adds: “It is about collating them, analysing them and finding the needle in the haystack that is funding terrorism or laundering money.”
The business has just raised £70m in a Series C funding with Goldman Sachs and the Ontario Teachers Pension Plan. Its A and B funding rounds were backed by Index Ventures and Balderton Capital. The company has built an extensive client base – 500 different businesses across 75 countries. Charles says: “They were attracted by a best-in-class platform.” Plus, he adds, the company is the only one doing it.
Charles’s entrepreneurial bug started early, with a project called the Student Room when he was just 16. It went on to become the country’s largest online student community, with discussion forums for GCSE, A Level and university students, plus revision notes and careers advice. He taught himself how to code and then, “built tons of stuff on the internet. Lots of the ideas worked, but this was the most powerful.” The lessons? “That it was fun and I was good at doing it.”
While it set him on the path to entrepreneurship, it didn’t derail his academic ambitions. He went on to study politics at Trinity College Cambridge and then did an MSc in Management, Strategy, and Finance at the London School of Economics. After leaving university, he spent three years in investment banking at JP Morgan Cazenove.
His second venture was launched during the credit crisis. He saw an opportunity as banks moved away from funding SMEs in response to more stringent capital adequacy requirements. Market Finance was designed to help small companies get financing, directing capital from alternative sources such as hedge funds or high net worth investors. It raised around £80m and lent out £3.8bn.
Both companies are still going. Charles is on the board at the Student Room and is still a shareholder in Market Finance. For the Student Room, there was a natural end point when he left university. For Market Finance, he had built it with a co-founder and the co-founder has continued to run it alone.
His advice? “This is the best time ever to build companies. You can build them faster and cheaper than ever and it is easier to scale across the globe. We recognise that many FTSE 100 companies are outdated and there are new UK businesses there to be built. There is much more of a science to building companies now and people are much more accustomed to funding them.”
He believes entrepreneurship is a far more attractive choice for those emerging from education today. He says: “It wasn’t fashionable 20 years ago. People would rather get a job in a big corporate. Now it’s better to build your own great business.”
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