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A Winning Combination: Compliance.ai Acquired by Archer to Bring AI-Powered Regulatory Compliance to the Financial World

A Winning Combination: Compliance.ai Acquired by Archer to Bring AI-Powered Regulatory Compliance to the Financial World

By Bobby Yazdani, Founder & Managing Partner at Cota Capital

Today is an exciting day for Compliance.ai, as the company announces that it has been acquired by Archer. I’m thrilled for the entire team and can’t say enough about all the hard work and effort they put into building this remarkable business over the past seven years.

This is a company that was always ahead of its time. When it was founded back in 2016, Compliance.ai was one of the first startups to apply AI to a very specific vertical dataset. In this case, it was regulatory and compliance data within the financial services industry.

The thesis was that financial services is the perfect fit for this kind of AI application. Why? Because financial services is a large, highly regulated industry. Not only that, it’s an industry with a rapid rate of change. There are constantly new innovations coming to market, from cryptocurrencies to lending products. And so there are also constantly new rules and regulations to keep up with.

 

Revolutionizing regulatory compliance

Compliance.ai saw that the financial services industry was dealing with this problem simply by throwing more and more lawyers at it. The job of these lawyers was to read more and more documents and try to interpret all the new regulations. It was a brute-force method and often insufficient to stay compliant.

The company understood that its AI technology could augment the human lawyers and help them do their work faster, with greater efficiency and accuracy. Compliance.ai does it by providing a regulatory compliance and risk management solution that applies purpose-built machine learning models to automatically monitor the regulatory environment for relevant changes and map them to internal policies, procedures, and controls. It ensures that financial services companies can track, react to, and report on impactful regulations and requirements on a timely basis.

What’s exceptional about the company is how fast it can add new sources of content to its system and how well the technology can learn from that new content. In essence, the technology reads through thousands of documents from multiple jurisdictions and digests all the new rules. It then advises its financial services customers, which have expanded to include clients in other sectors such as Insurance, Technology, and Energy, on how to proceed.

Typically, regulated companies operate under their own set of policies in addition to industry-wide rules and regulations. These policies are established to ensure compliance with applicable laws within the business. Compliance.ai examines both the customer’s internal policies and the industry-wide regulatory framework and assesses whether adjustments are needed to get the customer into compliance. Essentially, it serves as an expert advisor, guiding the implementation of internal policies necessary for regulatory compliance. The technology functions like a sort of super lawyer, with the ability to redline documents and highlight critical sections for consideration.

 

A founder who wins with integrity

Compliance.ai started with one customer and has since added more than 70 mid to large-sized regulated and multi-national institutions as clients.

So, what enabled the company to succeed so well? For one, it had a great founder, Kayvan Alikhani. He is an exceptional technologist and product leader. He’s also someone with tremendous integrity. He’s not a promoter, he’s a doer, and customers understand this. He’s focused on delivering the very best product and ensuring that customers are successful with it.

One of my core beliefs as an investor is that good guys win. And Kayvan and Compliance.ai are a perfect example of that. Kayvan is someone who always does the right thing, and you can see it in the way he treats his team, his customers, and his investors, always putting them ahead of himself. There were times when the situation was tight, and he refused to take a salary. His tenacity, hard work, and commitment to success cannot be overstated. The bottom line is that he knows how to win against all odds.

 

The road to success

This is the second company Kayvan and I have built and sold together. We were able to build and sell the first of such companies in 18 months. The path for Compliance.ai was not quite so smooth and, to be honest, there were a few jarring bumps along the way.

The first was Covid. After spending several years building and perfecting the product, the plan was to launch it in the market in early 2020. Well, we all know what happened next. Covid made it very difficult to get meetings with executives and sell the product. However, by 2021 we were back on track—until the financial markets started a major correction. Then, when the markets started looking up again, we were hit with the regional banking crisis of 2023, which was devastating to significant players like Silicon Valley Bank and First Republic. Just as Compliance.ai had found its footing, the sales pipeline came to a sudden halt.

But it’s a resilient group at Compliance.ai and they survived and succeeded by focusing on the meat and potatoes: making a great product and keeping customers happy.

 

A bright future ahead

The Archer acquisition comes at the right time. The choice Kayvan and the team had was clear: do we try to raise a lot more money and build a big direct sales team? Or do we embed ourselves within a much larger company with better access to the market? It was a smart, strategic decision to sell the company to Archer, which is an incredible brand, not just trusted as a global leader in providing integrated risk management solutions within the financial services industry, but also in other highly regulated sectors.

Going forward, the entire Compliance.ai team will be charged with expediting the AI strategy within Archer and their technology will serve as the cornerstone of Archer’s AI initiatives.

I couldn’t be more proud of what this team has accomplished, and I know that they can look forward to even greater success ahead.

A Winning Combination: Compliance.ai Acquired by Archer to Bring AI-Powered Regulatory Compliance to the Financial World

By Bobby Yazdani, Founder & Managing Partner at Cota Capital

Today is an exciting day for Compliance.ai, as the company announces that it has been acquired by Archer. I’m thrilled for the entire team and can’t say enough about all the hard work and effort they put into building this remarkable business over the past seven years.

This is a company that was always ahead of its time. When it was founded back in 2016, Compliance.ai was one of the first startups to apply AI to a very specific vertical dataset. In this case, it was regulatory and compliance data within the financial services industry.

The thesis was that financial services is the perfect fit for this kind of AI application. Why? Because financial services is a large, highly regulated industry. Not only that, it’s an industry with a rapid rate of change. There are constantly new innovations coming to market, from cryptocurrencies to lending products. And so there are also constantly new rules and regulations to keep up with.

 

Revolutionizing regulatory compliance

Compliance.ai saw that the financial services industry was dealing with this problem simply by throwing more and more lawyers at it. The job of these lawyers was to read more and more documents and try to interpret all the new regulations. It was a brute-force method and often insufficient to stay compliant.

The company understood that its AI technology could augment the human lawyers and help them do their work faster, with greater efficiency and accuracy. Compliance.ai does it by providing a regulatory compliance and risk management solution that applies purpose-built machine learning models to automatically monitor the regulatory environment for relevant changes and map them to internal policies, procedures, and controls. It ensures that financial services companies can track, react to, and report on impactful regulations and requirements on a timely basis.

What’s exceptional about the company is how fast it can add new sources of content to its system and how well the technology can learn from that new content. In essence, the technology reads through thousands of documents from multiple jurisdictions and digests all the new rules. It then advises its financial services customers, which have expanded to include clients in other sectors such as Insurance, Technology, and Energy, on how to proceed.

Typically, regulated companies operate under their own set of policies in addition to industry-wide rules and regulations. These policies are established to ensure compliance with applicable laws within the business. Compliance.ai examines both the customer’s internal policies and the industry-wide regulatory framework and assesses whether adjustments are needed to get the customer into compliance. Essentially, it serves as an expert advisor, guiding the implementation of internal policies necessary for regulatory compliance. The technology functions like a sort of super lawyer, with the ability to redline documents and highlight critical sections for consideration.

 

A founder who wins with integrity

Compliance.ai started with one customer and has since added more than 70 mid to large-sized regulated and multi-national institutions as clients.

So, what enabled the company to succeed so well? For one, it had a great founder, Kayvan Alikhani. He is an exceptional technologist and product leader. He’s also someone with tremendous integrity. He’s not a promoter, he’s a doer, and customers understand this. He’s focused on delivering the very best product and ensuring that customers are successful with it.

One of my core beliefs as an investor is that good guys win. And Kayvan and Compliance.ai are a perfect example of that. Kayvan is someone who always does the right thing, and you can see it in the way he treats his team, his customers, and his investors, always putting them ahead of himself. There were times when the situation was tight, and he refused to take a salary. His tenacity, hard work, and commitment to success cannot be overstated. The bottom line is that he knows how to win against all odds.

 

The road to success

This is the second company Kayvan and I have built and sold together. We were able to build and sell the first of such companies in 18 months. The path for Compliance.ai was not quite so smooth and, to be honest, there were a few jarring bumps along the way.

The first was Covid. After spending several years building and perfecting the product, the plan was to launch it in the market in early 2020. Well, we all know what happened next. Covid made it very difficult to get meetings with executives and sell the product. However, by 2021 we were back on track—until the financial markets started a major correction. Then, when the markets started looking up again, we were hit with the regional banking crisis of 2023, which was devastating to significant players like Silicon Valley Bank and First Republic. Just as Compliance.ai had found its footing, the sales pipeline came to a sudden halt.

But it’s a resilient group at Compliance.ai and they survived and succeeded by focusing on the meat and potatoes: making a great product and keeping customers happy.

 

A bright future ahead

The Archer acquisition comes at the right time. The choice Kayvan and the team had was clear: do we try to raise a lot more money and build a big direct sales team? Or do we embed ourselves within a much larger company with better access to the market? It was a smart, strategic decision to sell the company to Archer, which is an incredible brand, not just trusted as a global leader in providing integrated risk management solutions within the financial services industry, but also in other highly regulated sectors.

Going forward, the entire Compliance.ai team will be charged with expediting the AI strategy within Archer and their technology will serve as the cornerstone of Archer’s AI initiatives.

I couldn’t be more proud of what this team has accomplished, and I know that they can look forward to even greater success ahead.

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