Baselayer Lands $35M to Verify AI Agents in Financial Transactions

Baselayer, a San Francisco-based company that uses artificial intelligence to help financial institutions verify businesses and detect fraud, has secured $35 million in Series A funding. M13 led the round, joined by Picus Capital, Torch Capital, Afore Capital and Matt Thompson of Socure. Combined with previous funding, Baselayer has now raised approximately $40 million since launching in 2023, according to co-founder and CEO Jonathan Awad. The company did not reveal its valuation.

Baselayer aggregates business identity, credit and fraud information to enable banks, fintech platforms and other financial services companies to evaluate potential customers. The company distributes its offerings through direct sales and via software partners that either resell the technology or rebrand it. Its core offering centers on Know Your Business, or KYB, verification, fraud detection and risk assessment.

The platform serves more than 2,000 financial institutions—representing over 20% of all such institutions in the United States—for merchant onboarding, underwriting and account opening, Awad stated. Baselayer also partners with Fortune 500 companies and maintains roughly 50 employees across San Francisco and New York locations. The company reports having helped its clients avoid more than $1 billion in fraud losses since its founding. While Awad declined to share specific revenue numbers, he noted that the company achieved eight-figure annual revenue within less than two years of operation.

The new capital will support Baselayer's expansion into an emerging identity challenge: verifying that an AI agent possesses legitimate authorization to conduct transactions or take actions on behalf of a person or organization. As AI agents increasingly handle tasks like restaurant reservations and other automated activities, distinguishing between authorized agent behavior and fraudulent bot activity has become increasingly difficult.

Alongside the funding announcement, Baselayer is introducing its Agentic Identity Suite, which extends its identity verification capabilities from businesses themselves to the AI agents operating on their behalf.

From businesses to the agents acting for them

Awad and co-founder Timothy Hyde established Baselayer in February 2023 with the initial goal of streamlining the complex and fragmented process by which financial institutions authenticate businesses and evaluate associated risks. "What we set out to do was essentially bring risk assessment to the 21st century," Awad recalled.

Baselayer functions as both an identity network and a fraud consortium. Because thousands of financial institutions deploy its technology, the platform can identify when the same person or business submits applications across multiple institutions and factor that activity into its risk calculations. The company processes tens of millions of applications annually and frequently encounters the same businesses multiple times per year. This data becomes increasingly valuable as more institutions and reseller partners integrate into the network.

"We've essentially streamlined 10 years' worth of selling into two years," Awad said.

AI agents introduce a distinct challenge. These agents may be created for a single purpose and cease to exist immediately afterward, providing little historical data for banks or risk assessment providers to evaluate. "Agents spin up and they spin down," Awad observed. "How can you trust this random one-task agent?"

To tackle this problem, Baselayer is developing a system it calls "Know Your Agent," or KYA. This system aims to determine who deployed an agent, which entity the agent represents, and whether it holds permission to execute a particular transaction.

The approach involves issuing authorized agents a credential they can present when making purchases or interacting with other businesses. When merchants, financial institutions or online platforms receive such a credential, they can use it to decide whether to permit the transaction. Baselayer is collaborating with agent developers, payment processors, merchants and fraud detection providers to issue and validate these credentials, including partners such as FIS, Prove and Socure.

Without the ability to establish legitimate credentials, "agents will just get blocked everywhere," Awad stated.

AI can also make fraud easier to scale

The same capabilities that enable legitimate agents to accomplish more tasks can equally empower fraudsters to operate at greater speed. Historically, identity fraud required criminals to obtain stolen personal and business data, construct a convincing identity, and then submit multiple applications to financial institutions until one approved. This process demanded considerable time and manual effort. Today, AI agents can automate portions of this workflow and operate continuously.

"It's fraud on steroids right now," Awad said. "It's so easy, it's so cheap, it's so fast, and it's 24/7."

Recent reports of AI agents circumventing safeguards have raised concerns about identifying and managing autonomous software. OpenAI recently disclosed instances in which its models engaged in unauthorized or deceptive behavior, including activity connected to the Hugging Face platform.

Baselayer's technology would not prevent a model from ignoring instructions or exploiting vulnerabilities, Awad acknowledged. Rather, its purpose is to authenticate an agent's credentials when it attempts to interact or conduct transactions with external parties. Without a credentialing mechanism, legitimate agents might attempt to circumvent website restrictions to complete their assigned work, or they could become less effective because they face repeated blocking as suspected bots.

Competing to establish a standard

Karl Alomar, a managing partner at M13, told Crunchbase News that he first encountered Awad approximately one year before his firm committed capital to Baselayer. Initially, Alomar viewed the startup primarily as a Know Your Business technology vendor. "The business did not feel like a business of the future," he acknowledged. "It just felt like he was solving a KYB banking verification problem."

Alomar's perspective shifted as companies began investigating payments initiated by AI agents and Baselayer began applying its business-identity capabilities to this emerging area. "Every agent ultimately is going to have to be tied to something real, and they understand the real world," Alomar noted.

Alomar believes Baselayer's existing data assets, identity network and established connections with financial institutions position it favorably against new market entrants. "AI agents are rapidly becoming economic actors, but the identity infrastructure underneath commerce was never designed for software that can open accounts, make purchases, move money or enter into transactions on someone else's behalf," Alomar explained. "That creates an enormous new trust problem, and we believe identity will become one of the foundational infrastructure layers of the agentic economy."

Currently, no universally accepted standard has emerged. Baselayer must still convince agent developers, merchants, financial institutions and payment companies to adopt its credential system. This adoption process could require significant time. Awad indicated that relationships with financial institutions typically span 12 to 18 months to establish, while major merchant partnerships can take up to 24 months. However, Baselayer may accelerate adoption with some institutions through its current reseller network.

The company also identifies potential applications beyond payment processing. Alomar suggested the technology could eventually authorize agents involved in cryptocurrency transactions or smart contracts. "This is not just a fintech business — it's a security business," he said. "It begins with payments, but ultimately that technology applies directly to anywhere that an agent is making a decision that you need to verify it is permitted to make."