Sigma Ratings, a New York-based non-credit risk ratings agency, has raised $2.4m in seed funding.
The round was led by FinTech Collective and also included investment from TechStars, Barclays and angel investors in New York, Silicon Valley and from high-growth emerging markets.
Sigma Ratings deploys a proprietary algorithm, deep domain expertise and innovative technology to rate a company’s vulnerability to financial crime and governance risk.
Unlike traditional rating companies, Sigma Ratings is focused on emerging markets, providing novel, dynamic, entity-level conduct risk analytics.
By collecting and quantifying specific operational risk data around compliance, governance and other non-credit risk factors, Sigma Ratings helps its growing client base improve their ability to assess and monitor important counterparty risk elements.
Its ratings also provide a mechanism for emerging market financial institutions to highlight efforts to manage risk, allowing them to differentiate and create new business relationships.
“Risk is evolving and credit risk only gives you part of the picture,” said Sigma CEO Stuart Jones, Jr. who appeared on CNBC’s Capital Connection this week. “Risk associated with counterparty illicit finance and conduct risk is equally – if not more – important for companies operating in complex markets. For most responsible boards we talk to, it’s a top three issue.”
Jones, a former senior U.S. Treasury official with tours in Afghanistan and the Middle East, co-founded the company with Gabrielle Haddad, an accomplished international development lawyer.
Sigma Ratings will publish its first found of ratings in July, which will include scores of 500 financial entities around the world. These banks include those in emerging markets that have strong ties to U.S. investments. Regions covered in these scores include the Middle East, Latin America, and Eastern Europe.
“What is unique about the Sigma Ratings team is that they saw a growing problem from inside the corridors of government and international development finance, and found an innovative way to marry their unique knowledge with cutting-edge technology,” added Gareth Jones, managing partner at FinTech Collective.
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
