Baselayer Raises $35M to Bring Identity Checks to AI Agents

Baselayer has raised $35 million in a Series A led by M13, with the San Francisco startup betting that the next identity crisis in financial services will come not from people or businesses but from AI agents acting on their behalf.

Picus Capital, Torch Capital, Afore Capital and Matt Thompson of Socure also participated in the round. The financing brings Baselayer's total funding to roughly $40 million since its 2023 inception, according to co-founder and CEO Jonathan Awad. The company declined to disclose its valuation.

Baselayer combines business identity, credit and fraud data to help banks, fintechs and other financial-services providers evaluate prospective customers. It sells directly and through software companies that resell or rebrand its technology. More than 2,000 financial institutions — over 20% of such institutions in the U.S. — use its platform to onboard, underwrite and open accounts for merchants, Awad said. The company, which has about 50 employees across offices in San Francisco and New York, claims its technology has helped customers prevent more than $1 billion in fraud losses. Awad declined to share revenue figures beyond saying Baselayer hit eight figures in under two years.

Alongside the raise, Baselayer announced the launch of its Agentic Identity Suite, extending its identity network from businesses to the AI agents transacting for them.

From KYB to KYA

Awad and co-founder Timothy Hyde started Baselayer in February 2023 to fix the lengthy, fragmented process financial institutions use to verify businesses and assess risk. "What we set out to do was essentially bring risk assessment to the 21st century," Awad recalls.

The company operates as both an identity network and a fraud consortium. Because thousands of institutions use its technology, Baselayer can recognize when the same person or business applies at multiple institutions and factor that into risk scoring. It processes tens of millions of applications and sees many of the same businesses multiple times a year. "We've essentially streamlined 10 years' worth of selling into two years," Awad said.

AI agents present a different problem. An agent may exist for a single task and disappear immediately, leaving no history to evaluate. "Agents spin up and they spin down," Awad said. "How can you trust this random one-task agent?"

Baselayer's answer is "Know Your Agent," or KYA. The system is designed to determine who deployed an agent, who it represents and whether it has permission to carry out a given task. An authorized agent would carry a credential it presents when making a purchase or interacting with another business; merchants, banks and platforms could then decide whether to let the transaction proceed.

Baselayer is working with agent developers, payment processors, merchants and fraud-detection providers — including FIS, Prove and Socure — to issue and recognize the credential. Unless agents can prove they act for legitimate people or businesses, "agents will just get blocked everywhere," Awad said.

Fraud gets faster too

The same technology powering legitimate agents also helps fraudsters scale. Identity fraud that once required significant manual work can now run continuously through automation. "It's fraud on steroids right now," Awad said. "It's so easy, it's so cheap, it's so fast, and it's 24/7."

OpenAI recently reported incidents in which its models took unauthorized or deceptive actions, including activity involving the Hugging Face platform. Awad acknowledged Baselayer's technology would not stop a model from disregarding instructions or exploiting a vulnerability. Its goal is narrower: verify an agent's credentials when it interacts with an outside party.

A race to set the standard

M13 managing partner Karl Alomar met Awad about a year before investing. At the time, he saw the startup as a KYB provider. "The business did not feel like a business of the future," he admits. "It just felt like he was solving a KYB banking verification problem."

His view changed as companies began exploring payments made by AI agents and Baselayer started applying its business-identity data to the field. "Every agent ultimately is going to have to be tied to something real, and they understand the real world," Alomar said.

"AI agents are rapidly becoming economic actors, but the identity infrastructure underneath commerce was never designed for software that can open accounts, make purchases, move money or enter into transactions on someone else's behalf," Alomar added. "That creates an enormous new trust problem, and we believe identity will become one of the foundational infrastructure layers of the agentic economy."

No dominant standard exists yet. Baselayer must persuade agent developers, merchants, financial institutions and payment companies to recognize its credential — a slow process. Awad said financial-institution relationships typically take 12 to 18 months to establish, and large merchant partnerships up to 24 months, though existing reseller relationships could accelerate some deals.

Alomar sees uses beyond payments, including authorizing agents in cryptocurrency transactions or smart contracts. "This is not just a fintech business — it's a security business," he said. "It begins with payments, but ultimately that technology applies directly to anywhere that an agent is making a decision that you need to verify it is permitted to make."