Shield Bags Secures $15M Series A Funding

Financial Crime Compliance Costs Surge, Fueling Shield's $15 Million Series A

Significant increases in the expenses associated with financial crime compliance have been observed over the last two years. Costs have approached $50 billion in 2021, representing a 58% rise compared to 2019 figures for the U.S. and Canada.

Shield's Compliance Surveillance Platform

Shield, a startup headquartered in Tel Aviv, has developed a compliance surveillance platform. This platform is designed to assist regulated financial institutions in identifying market abuse, conducting behavioral analysis, and mitigating issues related to workplace culture.

Furthermore, the platform automates the monitoring of employee communication channels.

Series A Funding Announcement

The company recently announced the successful completion of a $15 million Series A funding round. Macquarie Capital and OurCrowd co-led the investment, with additional participation from Mindset Ventures.

Expansion Plans and Platform Development

The newly acquired funds will be utilized to substantially broaden Shield’s presence within the United States. This includes the establishment of a new office in New York City.

The company also intends to further solidify its position in key markets across Europe, the Middle East, Africa, and Asia.

A significant portion of the investment will be dedicated to accelerating the development of its communication compliance platform.

The Rise of Cloud-Based Solutions

As remote and hybrid work models become increasingly prevalent, global banks are placing greater reliance on compliance platforms. This observation was made by Shiran Weitzman, co-founder and CEO of Shield.

The current industry trend demonstrates an active pursuit of cloud-based solutions, as evidenced by Shield’s recent acquisition of a tier-one global bank as a client.

Platform Capabilities

Shield’s platform leverages advanced artificial intelligence and natural language processing (NLP). It employs rigorous data enrichment, powerful analytics, and enhanced search capabilities.

Proactive surveillance features are also integrated into the system.

The company states that Shield enables organizations of all sizes and across various industries to effectively mitigate risks, overcome challenges associated with data silos, enhance operational efficiency, and reduce overall compliance costs.

CEO Statement on Funding

“The increasing difficulty organizations face in accessing and understanding evolving communication channels is a growing concern across all industries,” stated Weitzman. “This funding will empower us to scale our technology and improve our robust platform, addressing the daily compliance challenges faced by enterprises.”

Weitzman further emphasized that, as a bootstrapped company, Shield has already demonstrated the substantial value of its AI platform to banks and financial institutions.

Regulatory Requirements and Privacy

Financial regulations mandate that financial institutions capture all communication channels utilized by regulated employees, including traders and back-office personnel, according to Weitzman.

Employees are aware that their communications on designated channels are subject to monitoring.

Shield prioritizes privacy through its proprietary privacy content recognition (PCR) engine. This engine automatically masks personally identifiable information within communications, including emails, chats, and voice recordings.

Growth and Market Projections

Currently, Shield monitors over 150,000 regulated employees and analyzes more than 53 million interactions daily. The company has experienced year-over-year revenue growth exceeding 200% since its founding in 2018.

Customer growth has also been substantial, with a 200% increase year-over-year.

According to Polaris Market Research, the global market for enterprise governance, risk, and compliance is projected to reach nearly $97 billion by 2028.

Investor Perspective

“Shield’s new architectural approach to software development supports hybrid working, manages evolving compliance needs, and embraces cloud-native technologies,” said David Standen, co-head of Venture Capital Group at Macquarie Capital.

“Their agile development and rapid implementation capabilities position Shield as a potential market leader. We are pleased to lead this investment and support the talented team at Shield.”