Regulatory compliance startup Zango AI has raised $4.8 Mn (about INR 41 Cr) in a seed funding round led by Nexus Venture Partners, with participation from existing backers, including South Park Commons, Notion Capital, No Label Ventures and Start Ventures.

Zango AI plans to deploy the fresh proceeds to expand its teams in Bengaluru and London and building product modules for an AI-native governance risk and compliance.

The AI-based SaaS startup also aims to expand its offerings to insurance and asset management.

Founded in 2024 by Ritesh Singhania and Shashank Agarwal, Zango leverages AI to provide regulatory compliance solutions to banks and financial institutions. It has developed AI agents trained on regulatory focussed large language models which helps its clients to automate slow and manual workflows in compliance activities.

The Bengaluru and San Francisco-based startup cited an example of a bank which was able to bring down its regulatory activity workflow time to just four hours from 48 hours using their solutions.

This is not the first tryst for Singhania and Agarwal in the compliance space. While Singhania had previously founded ClearGlass, a pension compliance platform, Agarwal also founded an AI-powered fraud detection platform called Third Watch. In 2019, Third Watch was acquired by Razorpay, valued at $7.5 Bn.

The development comes at a time when Indian investors are keen to bet on SaaS platforms which have embedded AI solutions at their core. Indian venture capital firms are keen to bet on SaaS startups which have built their fundamentals on AI and trained their algorithms on private data. In total, Indian SaaS startups raised over $2.1 Bn in 2024, up 31% on a year-on-year basis.

In the global compliance solutions space, Zango is competing with the likes of Sprinto, Vanta, and Drata, among others, In India, Yellow.ai, Haptik and RevRag.ai are some of the AI-powered platforms which automate workflows for the BFSI sector.

The Indian SaaS market is expected to reach the $70 Bn mark by 2030, according to an Inc42 report.

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