Baselayer Raises $35M to Verify Whether AI Agents Are Authorized to Transact

Baselayer, a startup that helps financial institutions verify businesses and assess fraud risk, has raised $35 million to expand its identity technology to AI agents. M13 led the Series A round, joined by Picus Capital, Torch Capital, Afore Capital and Matt Thompson of Socure. The funding brings total investment to about $40 million since the company's 2023 launch, co-founder and CEO Jonathan Awad said. Baselayer declined to disclose its valuation.

Founded in February 2023 by Awad and Timothy Hyde, the San Francisco company began as a Know Your Business, or KYB, provider, combining business identity, credit and fraud data for banks, fintechs and other financial services companies. More than 2,000 financial institutions, over 20% of such institutions in the United States, use it to onboard and open accounts for merchants.

Know Your Agent

The new capital targets a harder problem: whether an AI agent is authorized to act for a given person or business. Unlike a company, an agent may be created for a single task and disappear, leaving little history for a bank to evaluate. “Agents spin up and they spin down,” Awad said. “How can you trust this random one-task agent?”

Alongside the raise, Baselayer launched its Agentic Identity Suite, extending its identity network from businesses to the agents transacting for them. The “Know Your Agent,” or KYA, system establishes who deployed an agent, whom it represents and whether it has permission for a particular task. An authorized agent would present a credential when buying something or interacting with another business; a merchant or platform could then decide whether to allow the transaction. Baselayer is working with agent developers, payment processors and fraud-detection providers, including FIS, Prove and Socure, to issue and recognize that credential. Without proof that they represent legitimate people or businesses, Awad said, agents “will just get blocked everywhere.”

Fraud at machine speed

The same automation also helps fraudsters: identity fraud that once took stolen data and repeated applications can now run around the clock. “It's fraud on steroids right now,” Awad said.

The race to set a standard

No dominant standard exists yet. M13 managing partner Karl Alomar said he met Awad about a year before investing, when Baselayer still looked like a KYB provider. His view changed as more companies explored payments made by AI agents. “AI agents are rapidly becoming economic actors, but the identity infrastructure underneath commerce was never designed for software that can open accounts, move money or transact on someone else's behalf,” he said. “This is not just a fintech business — it's a security business.”