Taktile raises $20M to help fintech companies test and implement decision-making models • TechCrunch

The logic behind many fintech companies’ automated decisions—decisions that determine whether a customer is approved for a line of credit, for example—is hard-coded into the backend of their app. This means that if a credit manager, for example, wants to make a change to the lending criteria, he or she must file a ticket with the IT department.

To make changing this kind of automated logic more of a self-service process, Maximilian Eber and Maik Taro Wehmeyer founded Taktile in 2020. The two met while studying at Harvard and were both part of the leadership team at QuantCo, a company that creates artificial intelligence. Advanced applications for business customers. While there, they discovered that many automated decisions were poorly designed, rarely tested correctly, and required a lot of engineering power, ultimately leading to guesswork.

“Based on our experience, we decided to build a platform, Taktile, to empower experts, like a risk manager, to design, test, and implement decision flows on their own without the need for developers,” Wehmeyer said in an emailed interview. electronic. . “By using Taktile, fintechs can adjust their risk selection based on data and ensure they only write risks that match their strategy.”

When asked about the size of Taktile’s customer base and financials, Wehmeyer declined to comment, citing competitive reasons. But investors apparently see growth potential. Taktile today closed a $20 million Series A round co-led by Index Ventures and Tiger Global, bringing the startup’s total raised to $24.7 million. Tiger’s involvement is especially notable when you consider that the venture capital firm recently scaled back investments, targeting $6 billion for its next fund, half the size of its previous investment vehicle.

“The round was preempted by Tiger Global and Index Ventures as they saw strong indications of product-to-market fit and believed the time was right to start scaling the business,” Wehmeyer said. “This round will help us further accelerate our ongoing expansion into the US, where we have seen rapid growth, increasing our customer base by 4x since the end of last year.”

Image Credits: Tactile

For clients, Taktile offers a no-code interface that allows non-technical employees to create, tune, and evaluate decision flows. Wehmeyer gave an example: Suppose a bank wanted to modify its lending criteria by changing the minimum age to apply for an account from 25 to 21 years old. implementing it.

Users can also take advantage of Taktile to experiment with out-of-the-box data integrations and monitor the performance of predictive models in their decision flows, Wehmeyer said, running A/B tests to evaluate those flows. He says Branch, Moss, Rhino, Novo and Vivid Money are among the fintechs that use the platform to drive 280,000 decisions every day.

“From the beginning, our technology has been used by advanced lenders who host machine learning models on our platform, which process thousands of variables from alternative data sources to assess the creditworthiness of potential borrowers,” Wehmeyer added.

It is a large amount of sensitive data that Taktile handles. To allay fears from privacy advocates, customers and regulators, Wehmeyer says Taktile created technology that allows its customers to host decision flows in the country of their choice and process data locally, a requirement for many regulatory agencies. .

That probably won’t solve the different but related problem of algorithmic transparency. As recently detailed in The New York Times, some lenders are increasingly turning to original data sources to assess creditworthiness, presenting opportunities to consumers historically excluded from certain financial products, but at the same time amplifying the risk of perpetuating bias or making inaccurate predictions.

Taktile puts the onus on its fintech clients to communicate the types of data and models they are hosting and deploying through the platform.

“The decision-making needs of the financial industry are rapidly evolving, especially when it comes to infusing decisions with machine learning and applying data-driven optimization of decision workflows,” Wehmeyer said. “These needs aren’t really being met by the legacy players in the market, so we mostly compete with in-house solutions built by sophisticated teams.”

Wehmeyer also sees Noble, a platform that provides a rules-based engine for editing and launching credit models, as a rival. But he says Taktile, which went through Y Combinator, has a “healthy” cost structure and plenty of capital to hire talent.

“Before the technology slowdown, fintechs were primarily driven by customer growth at any cost. Now, however, investors expect a clear path to profitability, making sophisticated risk decision making a difficult requirement,” Wehmeyer said. “Building a complex decision-making system takes years of work and costs millions of dollars, so rather than go down this path, clients are turning to platforms like Taktile to quickly adapt to these volatile new market dynamics.”

Taktile, which employs a team of 45 people, has offices in New York, London and Berlin. Wehmeyer says he expects the workforce to grow to 70 people by the end of 2023.

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