Irish fintech Fenergo has made its first acquisition, scooping up Amsterdam-based Sentinels and strengthening its ability to help customers tackle financial crime.
The value of the deal was not disclosed, although it is understood to be a significant eight-figure sum.
As part of the acquisition, the 70 staff currently employed by Sentinels will become part of Fenergo, further boosting its 1,000-strong workforce.
Founded in 2008, Fenergo develops software for financial institutions that helps them with issues such as regulatory compliance and managing client data.
It is now looking closer at helping clients monitor for financial crime, which the Sentinels acquisition will bolster.
"We help banks on board customers safely as it pertains to know your customer and anti-money laundering," founder and chief executive Marc Murphy said, adding that clients were interested in Fenergo looking at the behavioural pattern, financial analysis and transaction monitoring to see what's happening in an account.
Sentinels, which was founded in 2019 and offers anti-money laundering (AML) transaction monitoring with artificial intelligence-based technology, was one of a number of businesses that were shortlisted.
“We chose Sentinels because of the modern technology that they’ve developed. It’s very AI-centric. It’s continuous learning that is at the leading edge of the next generation of the technology,” Mr Murphy said.
Adding transaction compliance to Fenergo’s existing solutions will allow financial institutions to monitor and review client behaviour and identify risks on an ongoing basis.
“With compliance costs surging to unsustainable levels, being blindsided by increasingly sophisticated criminal activity is simply not an option,” said Joost van Houten, founder and chief executive of Sentinels. “It is therefore imperative for financial institutions to break through data siloes and start assessing client risk holistically across know your customer and transaction monitoring.”
First of series
It could also be the first of a series of acquisitions for the fintech. In 2021, it became one of only a handful of Irish tech unicorns last year when it achieved a $1 billion-plus (€880 million) valuation. Mr Murphy said the company now has a war chest to support its growth, and plans more in the next couple of years.
“We have funded this transaction out of it, and we have space for two more in the post code of what we would like to spend,” he said. “We don’t need to go back to the market for money.”
The next milestone for Fenergo will be in summer of 2025, when Mr Murphy said the company would make a decision on whether to raise further investment from private equity partners, or opt for an initial public offering .