Baselayer, a San Francisco startup that helps financial institutions verify businesses and assess fraud risk, has raised $35 million to expand its identity technology to AI agents, according to an announcement from Crunchbase News. M13 led the Series A round, with participation from Picus Capital, Torch Capital, Afore Capital, and Matt Thompson of Socure. The financing is aimed at addressing a growing challenge: determining whether an AI agent is actually authorized to act on behalf of a particular person or business as these autonomous tools become more common in commercial transactions.
The company now serves more than 2,000 financial institutions — representing over 20% of such organizations in the U.S. — that use its technology to onboard, underwrite, and open accounts for merchants, according to co-founder and CEO Jonathan Awad. Since its February 2023 launch, Baselayer claims it has helped customers prevent more than $1 billion in fraud losses. The startup reached eight figures in revenue in less than two years, though Awad declined to provide exact revenue numbers. The new capital brings Baselayer's total funding to approximately $40 million. The company works with Fortune 500 firms and employs about 50 people across offices in San Francisco and New York.
Alongside its fundraise, Baselayer is launching its Agentic Identity Suite, extending its identity network from businesses to the AI agents transacting on their behalf. The system, which the company describes as "Know Your Agent," or KYA, is designed to determine who deployed an agent, who that agent represents, and whether it has permission to carry out a specific task. Awad explained that the startup is working with agent developers, payment processors, merchants, and fraud-detection providers — including FIS, Prove, and Socure — to issue and recognize credentials that authorized agents can present when attempting to make purchases or interact with other businesses. "Unless agents can establish that they are acting on behalf of legitimate people or businesses, agents will just get blocked everywhere," Awad said in the report.
The need for such verification stems from AI's dual nature: while it enables legitimate agents to automate tasks, it also makes fraud easier to scale. Awad noted that identity fraud once required significant manual work, but AI agents can now automate the process and run continuously. "It's fraud on steroids right now," he said. "It's so easy, it's so cheap, it's so fast, and it's 24/7." M13 managing partner Karl Alomar told Crunchbase News that Baselayer's existing data, identity network, and relationships with financial institutions give it an advantage over startups entering the market from scratch. He believes the company's business-identity data positions it well for the emerging field of agent verification.
Establishing a standard for AI agent credentials won't happen quickly, however. Awad said relationships with financial institutions typically take 12 to 18 months to establish, while large merchant partnerships can take up to 24 months. The company may reach some organizations faster through its existing reseller relationships, which sell or rebrand Baselayer's technology. Beyond payments, the technology could eventually authorize agents involved in cryptocurrency transactions or smart contracts, according to Alomar, who described it as "not just a fintech business — it's a security business." The report indicates that without a reliable way to identify themselves, legitimate agents may resort to circumventing website restrictions just to complete their assigned tasks, or become less useful because they're repeatedly blocked as suspected bots. The race to define how autonomous software proves its legitimacy has only just begun, and the outcome will shape whether AI agents become trusted economic participants or remain locked out of the financial system.