Fintech RedOwl to seek $15m for AI-driven costs card

A fintech is looking to raise $15m to supercharge the launch of its AI-driven cost control solutions card to keep a company’s staff spending within set guidelines.

RedOwl founders Jitto Arulampalam and Thushan Shanmugarajah.

Melbourne-based fintech RedOwl will soon go to market to raise up to $15m to supercharge the imminent launch of its AI-driven cost control solutions, as well as a credit card with the in-built ability to keep staff spending within set guidelines.

The company, which launched early last year, has developed two main solutions for enterprises, the first being a system that tracks, authorises and reconciles employee credit card spending, ensuring money spent is within budget and guidelines.

The company last year was ­selected as one of eight start-ups globally to join Mastercard’s Start Path Small Business Program, and as part of that received $2.9m in non-dilutive funding to launch its card solution in Australia.

RedOwl is also working on a broader solution for company ­finance managers, which will give them real-time information on their business as a whole, allowing them to have an up-to-date view of their finances.

“One of the common issues I encountered in the start-up world and in my previous banking ­career was to see CFOs, even with the amount of software and tools that they have, are unable to enforce transactional controls and make strategic decisions in real time,’’ co-founder Jitto Arulampalam said.

“Information is always late, ­always not 100 per cent intact.

“The data that they rely on is spread across multiple software systems and inputs, and to make sense of that in an increasingly complex word is getting harder.’’

Mr Arulampalam said that, on the corporate credit card front, a fundamental flaw of the system as it currently stood was that if an employee wanted to spend inappropriately, there was little to stop them.

“As long as there’s credit on it, or a cash balance, the employee can go and spend it and it will work,’’ he said.

“When it comes to the reconciliation at the end of the month, that’s when the CFO or the manager will say, ‘why did you spend this money? This doesn’t look work-related’, and all sorts of investigations will go on.

“We thought, in the age of AI, why can’t we do that – institute controls before that happens?

“Why can’t we bring AI to payment trails so that the CFO or the finance team can mandate where, how much, by whom and at what location a card can be used?

“So a card can be issued to everyone in the organisation so it will only work where the bosses have decided it can work.’’

Mr Arulampalam said Mastercard was impressed with the prototype built last year, saying it had never seen pre-transactional controls implemented in such a way. He said since then the company had been working with Mastercard and was close to launching its card solution.

The broader AI solution is likely to launch first, however.

“The RedOwl agent, for any issue the CFO wants to examine, is able to go and read the internal company documents, come back and be able to also come up with recommendations,’’ Mr Arulampalam said.

The private company data is firewalled from the broader internet, removing the risk of private data getting out into the public domain, for example through the use of generic AI agents that companies might be tempted to use to make workflows simpler.

Mr Arulampalam said the AI agent could also be used to carry out actions such as generating emails or asking for payment terms from a supplier, or even liaising with the tax office.

“Our invention was around the card and it grew into a product that can solve a bigger headache for the CFOs,’’ he said.

Mr Arulampalam said the card launch was waiting on regulatory approvals that should happen over the next three or four months, while the AI agent launch would come in the next few weeks.

He said RedOwl would also soon look to raise $10m-$15m to drive growth: “To date we have self-funded and have had some angel investors. We are planning a serious VC capital raise which will be soon after the launch.’’

Originally published as Fintech RedOwl to seek $15m for AI-driven costs card