New York-based Insight Partners has led a $12.5 million Series A round for Israel’s IVIX, which has built an artificial intelligence-based platform to detect tax evasion and other financial crimes at scale. New York’s Team8, San Francisco-based Citi Ventures and Israel’s Cardumen Capital were the other investors, all of whom have participated in earlier rounds. IVIX has so far raised $25.5 million.
“IVIX’s AI-powered platform is a game changer for government agencies combatting financial crimes,” said Hagi Schwartz, Insight Partners managing director, as the firm made its first investment in the Israeli firm. “The platform’s level of sophistication and adoption by tax authorities globally is impressive, and has the potential to enable governments to provide better services to its citizens.”
Trillions at Stake
“The IVIX platform, powered by AI and other data-driven tech, has significantly reduced tax evasion and fraud in multiple tax jurisdictions worldwide,” said Sarit Firon, managing partner at Team8.
IVIX was co-founded in 2020 by math graduates Mattan Fatal and Doron Passov. Fatal has a masters degree in math and previously co-founded and ran Silver Fort, which made identity protection software. He serves as IVIX’s CEO. Passov, who serves as the startup’s chief product officer, has been a software developer for over eight years.
Using AI and machine learning, the duo has built advanced software that analyzes publicly available data to deliver new insights about the shadow economy and tax evasion. The company reckons at least $20 trillion in global business activity goes unreported and untaxed. Besides older businesses like construction, newer ones such as crypto and e-commerce exacerbate the under-reporting of business. In the United States, a toll of that under-reporting is an estimated $1 trillion in annual tax loss, the Israeli company says.
Commercial Real Estate
MacKenzie Companies
Advertising / Media / Communications / Public Relations
Nevins & Associates
Financial Services / Investment Firms
Chesapeake Corporate Advisors
Commercial Real Estate
Monday Properties
Venture Capital
Blue Delta Capital Partners
Internet / Technology
Foxtrot Media
“IVIX has already helped cities, states and countries around the world recover billions in lost revenue and we’re excited about continuing our expansion with this new investment,” said Fattal.
Tapping IRS Smarts
IVIX is in use by major government agencies, including the U.S. Internal Revenue Service’s Criminal Investigation Division and multiple state tax authorities. It has also hired John D. Fort, who previously headed criminal investigation at IRS, as its chief business officer and former IRS commissioner Fred Goldberg as a member of its advisory board.
New York-based Insight Partners focuses on technology startups with high growth potential. It also makes private equity investments. As of 2022-end, the firm had over $75 billion in regulatory assets under management. It has invested in more than 750 companies worldwide, with over 55 going on to make initial public offerings. Insight’s recent portfolio investments include TytoCare, Haus Analytics, Kyverna Therapeutics, Silk Security and OneTrust.
