In a decisive bet on AI-driven compliance, Data Sutram has raised $9 million in a Series A round co-led by B Capital and Lightspeed, aiming to build India’s go-to fraud detection engine for the BFSI sector. The Mumbai-based SaaS firm wants to be more than just a vendor; it wants to become infrastructure.
Founded in 2019, the startup uses alternative data sources such as geolocation, behavioral trends, and economic activity to catch fraud before it happens. With Indian banks, NBFCs, and fintechs bleeding from rising defaults and mule accounts, the timing couldn’t be more critical.
Scaling the Battlefield of Risk
But the plan goes beyond banks. Data Sutram now wants to enter high-risk verticals like e-commerce, gaming, crypto, and even fast commerce. These are sectors where speed meets opacity, and oversight often struggles to keep up.
The company’s core value proposition lies in predictive intelligence for real-time underwriting and compliance. With the new funds, it plans to expand globally by targeting Southeast Asia and the Middle East, regions that face similar financial inclusion challenges and digital fraud patterns.
Yet growth hasn’t come cheap. The company reported a ₹10.83 crore loss in FY24, more than double from the previous year. Despite this, investors appear optimistic, viewing the losses as the price of building long-term technical advantages.
A Sector Under Siege
India’s BFSI ecosystem is navigating a crisis of trust. From small-town lending scams to identity fraud and fake salary slips, bad actors have grown increasingly sophisticated. In this environment, Data Sutram’s alternative data engine promises to serve as an invisible checkpoint that flags risks traditional KYC often overlooks.
But the ambition raises questions. Will outsourcing trust to AI create black-box systems that financial institutions cannot fully audit? Can ethical standards keep up with rapid deployment?
The company claims its models prioritize fairness and transparency. However, as with most AI tools, explainability often takes a backseat to performance.
The Ethics of Surveillance-as-a-Service
Behind the promise of fraud prevention lies a deeper concern: how much personal data is too much?
When algorithms scan everything from your location history to online behavior to assess creditworthiness, the line between protection and intrusion starts to blur.
As India’s digital economy expands, the real risk may not only be fraud. It may also be the quiet normalization of surveillance in the name of security.
A Crossroads for Fintech
Data Sutram’s funding marks a milestone, not just for the company but for the direction of the industry itself. It reflects a shift toward proactive, AI-first governance, a necessary evolution that comes with hidden trade-offs.
Because in the race to stop fraud, the industry must ask:
Can we build systems that protect without overreaching?
And can trust be automated without losing the human element?
Also Read: Proxgy Smart Helmets Can Talk, Record, and Guide Workers on the Job
