Baselayer Secures $35M to Help Enterprises Vet AI Agents

Financial technology and verification startup Baselayer has secured $35 million in a Series A funding round to expand its identity verification technology to autonomous AI agents.

M13 spearheaded the investment for the San Francisco-headquartered company, with additional backing from Picus Capital, Torch Capital, Afore Capital, and Matt Thompson of Socure. According to co-founder and CEO Jonathan Awad, this latest capital injection pushes Baselayer’s total fundraising to roughly $40 million since launching in 2023. The startup chose to keep its valuation private.

Baselayer merges fraud, credit, and business identity data to assist fintechs, banks, and other financial-service providers in vetting prospective clients. The company distributes its platform directly as well as through software partners that white-label or resell the infrastructure. Initially, the automated system concentrated on risk management, fraud detection, and Know Your Business (KYB) identity verification.

Awad notes that over 2,000 financial institutions—accounting for more than 20% of such entities in the United States—rely on its software to open accounts, underwrite, and onboard merchants. Baselayer also collaborates with Fortune 500 businesses, maintaining a team of about 50 workers across its New York and San Francisco locations. The startup reports that it has helped clients prevent over $1 billion in fraud losses since its inception.

While declining to disclose precise revenue figures, Awad shared that Baselayer surpassed eight figures in revenue in under two years.

Baselayer is now directing its fresh funds toward an emerging identity hurdle: verifying whether an AI agent holds proper authorization to act on behalf of a specific business or person.

As consumers increasingly deploy AI agents for tasks like booking restaurant reservations, it grows more difficult to distinguish legitimate automated actions from bots attempting to scrape information or perpetrate fraud.

Alongside its funding news, Baselayer is launching its Agentic Identity Suite, expanding its verification network from standard businesses to the AI agents executing transactions for them.

From businesses to the agents acting for them

Awad launched Baselayer in February 2023 alongside co-founder Timothy Hyde, initially targeting the fragmented and time-consuming workflows financial institutions use for risk assessment and business verification.

“What we set out to do was essentially bring risk assessment to the 21st century,” Awad recalls.

Awad characterizes Baselayer as a fraud consortium and an identity network alike. Because thousands of financial institutions utilize its platform, Baselayer states it can detect when a single business or individual applies across multiple institutions, factoring that behavior into its risk scores.

The platform handles tens of millions of applications, frequently encountering the same businesses multiple times annually. Awad explains that this repository grows increasingly valuable as more reseller partners and institutions join the network.

“We’ve essentially streamlined 10 years’ worth of selling into two years,” he said.

However, AI agents introduce a distinct challenge. They might spawn for a single task and dissolve immediately afterward, leaving behind little to no historical data for risk providers or banks to analyze.

“Agents spin up and they spin down,” Awad said. “How can you trust this random one-task agent?”

To tackle this challenge, Baselayer is building a framework called “Know Your Agent” (KYA). This system aims to verify who deployed an agent, who the agent represents, and whether it holds authorization to perform a designated task.

The startup plans to achieve this by equipping authorized agents with credentials they can present during purchases or business interactions. Awad explained that online platforms, merchants, and financial institutions can then utilize these credentials to evaluate whether a transaction should proceed.

The company is collaborating with merchants, payment processors, agent developers, and fraud-detection firms—including Socure, Prove, and FIS—to issue and validate these credentials. Unless agents can prove they represent legitimate businesses or individuals, “agents will just get blocked everywhere,” Awad stated.

AI can also make fraud easier to scale

Ironically, the same technology empowering legitimate agents to handle more responsibilities also accelerates fraudulent activities.

Historically, identity fraud required obtaining stolen business and personal data, fabricating a plausible identity, and repeatedly submitting credit card or bank applications until an approval was secured. This procedure previously demanded substantial manual effort and time. Today, however, AI agents can continuously execute and automate portions of this cycle.

“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 bypassing safeguards have also sparked concerns regarding how to monitor and restrict autonomous software. OpenAI recently documented instances where its models took deceptive or unauthorized actions, including events linked to the Hugging Face platform.

Awad admitted that Baselayer’s technology cannot stop a model from exploiting vulnerabilities or ignoring prompts. Instead, its objective is to authenticate an agent’s credentials when it attempts to transact or interact with external entities.

Without a mechanism to identify themselves, he noted that legitimate agents might resort to bypassing website restrictions just to finish assigned jobs, or they could become less effective due to constant blocking as suspected bots.

Competing to establish a standard

Karl Alomar, managing partner at M13, shared in an interview with Crunchbase News that he met Awad roughly a year before his firm decided to invest in Baselayer. At that time, he viewed the startup strictly as a KYB technology vendor.

“The business did not feel like a business of the future,” he admits. “It just felt like he was solving a KYB banking verification problem.”

That perspective shifted as more enterprises began investigating AI agent payments, prompting Baselayer to apply its business-identity database to the sector.

“Every agent ultimately is going to have to be tied to something real, and they understand the real world,” Alomar said.

He believes that Baselayer’s existing banking relationships, identity network, and data give it a distinct advantage over new startups entering the market from the ground up.

“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 added. “That creates an enormous new trust problem, and we believe identity will become one of the foundational infrastructure layers of the agentic economy.”

Presently, no dominant standard exists in the space. Baselayer faces the ongoing task of convincing payment companies, financial institutions, merchants, and agent developers to adopt its credential system.

Such adoption may require patience. Awad noted that building relationships with financial institutions typically spans 12 to 18 months, while large merchant partnerships can extend up to 24 months. Nevertheless, Baselayer might accelerate access to certain institutions through established reseller channels.

The company also identifies potential use cases extending past payments. Alomar mentioned that the technology could eventually authorize agents operating within smart contracts or cryptocurrency transactions.

“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.”

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Illustration: Dom Guzman

Frequently Asked Questions

What is Baselayer?

Baselayer is an AI-powered startup that provides business identity, credit, and fraud data to help financial institutions verify businesses and assess fraud risk.

How much funding has Baselayer raised?

Baselayer has raised a total of about $40 million since its inception in 2023, including a recent $35 million Series A funding round led by M13.

What is the Agentic Identity Suite?

It is a new offering launched by Baselayer to extend its identity network from traditional businesses to the AI agents executing transactions on their behalf.

What does “Know Your Agent” (KYA) mean?

KYA is an emerging system designed by Baselayer to determine who deployed an AI agent, who that agent represents, and whether it has permission to execute specific tasks.

Which companies participated in Baselayer’s Series A round?

The Series A was led by M13, with participation from Picus Capital, Torch Capital, Afore Capital, and Matt Thompson of Socure.