Coris raises $3.7M, sets sights on AI-driven paradigm shift in SMB risk management

Palo Alto, Calif.-based fintech startup Coris has announced $3.7 million in seed funding today to scale its AI-powered risk management platform. The company aims to bring automation and intelligence to the archaic processes still used by many financial services firms to evaluate risk for small and medium-sized business (SMB) customers.  

The seed round was co-led by top enterprise AI investor Lux Capital and fintech specialist Exponent Capital. Additional participation came from storied accelerator Y Combinator, Blank Ventures, and several veteran fintech founders.

Coris leverages large language models (LLMs) to parse unstructured data and derive insights for tasks like automated underwriting. Its newest product, CorShield, prevents impersonation fraud during SMB onboarding by cross-checking applicant data against various online sources.

“There’s a clear need for integrated risk infrastructure software with embedded AI for SMBs,” said Coris CEO Vinodh Poyyapakkam in an exclusive interview with VentureBeat. “Companies want to manage risk natively within their own platforms.” 

Advanced risk insights and fraud prevention

The injection of capital announced today will accelerate the deployment of Coris’s groundbreaking offerings, including CorShield, a first-of-its-kind SMB fraud model, and a comprehensive business verification product. These tools are set to overhaul the traditional, labor-intensive processes of SMB risk assessment.

The challenge is significant: the SMB sector boasts over 400 million companies, but risk analysis is hampered by fragmented, unstructured data. Coris’s answer involves leveraging large language models to synthesize this data, offering a granular understanding of potential risks without the lag and inaccuracies of manual processing.

Coris’s AI-driven platform is not just a time-saver; it is a strategic reimagining of risk management, offering a suite of tools that streamline onboarding and continuous monitoring. CorShield, for instance, mitigates fraud by cross-referencing SMB data against multiple sources to validate identities at signup, reducing the likelihood of impersonation and fraud.

Beyond fraud prevention, Coris’s MerchantProfiler offers real-time business verifications and industry classification, harnessing the power of GPT-4 to provide up-to-date data across 46 countries. This is crucial for software companies and fintechs aiming for global reach, as accurate classification is central to compliance and risk management.

Finally, Fuzio, Coris’s centralized risk management platform, empowers teams to automate routine risk assessments, configure custom rules, and take action based on comprehensive, consolidated data sources.

A major advance in SMB risk management

The results speak for themselves: Coris has already streamlined verification for over 150,000 SMBs and has data on over 330 million worldwide. Clients like Mindbody have seen SMB onboarding times quintupled and operational costs cut by half, with an 80% reduction in manual processes.

The total addressable market is substantial, with approximately 30 million SMBs in the U.S. alone. High startup formation post-COVID and the rise of embedded finance have created greater demand for automated, low-touch underwriting. Incumbents have been slow to leverage emerging technologies like natural language processing.

“There is so much unstructured data online, but millions of data points are not being standardized, cleaned, and leveraged appropriately,” noted Grace Isford, partner at Lux Capital, in an interview with VentureBeat. “Coris has a strong technical team that can wrangle this data at scale.”

With veteran risk and fraud experts from PayPal, eBay, and other fintech pioneers on its team, Coris looks to build on its early momentum. The seasoned founders’ vision is an integrated risk infrastructure software platform enhanced by AI.

As Coris scales, its ever-growing SMB dataset will compound the advantages of its machine learning algorithms in tackling this multi-billion-dollar market. The future looks bright for this emerging fintech leveraging AI and alternative data to reduce SMB risk.

Originally appeared on: TheSpuzz