South African AI scale-up Locstat has successfully closed a €2.5 million pre-Series A funding round, marking a critical step in its expansion strategy. The investment, led by Portugal Gateway Fund (PGF) with participation from ANZA Capital, is specifically earmarked to launch Locstat’s advanced fraud detection technology into the highly regulated UK and EU markets.
Locstat’s core strength lies in its graph-driven event processing platform. This advanced stack applies Graph AI to both streaming and static data, enabling the platform to surface complex relationships across transactions and events in real time.
In high-friction African transactional environments, the company has found repeat success with banks and fintechs, where its tooling is used for:
- Fraud Detection
- Anti-Money Laundering (AML) workflows
- Customer journey mapping
- Geo-spatial analytics
Management views these proven customer outcomes as the definitive proof points needed to establish local footprints and revenue streams in Europe.
The investment provides the resources needed to expand engineering and commercial teams and accelerate partner integrations ahead of a planned Series A round. However, the move is not without its hurdles.
Selling advanced analytics into European banks requires navigating complex competitive and regulatory waters. Locstat must meet rigorous standards for data governance, establish strong onshore partnerships, and provide clear evidence of model explainability.
Locstat’s key competitive advantage is its track record in demanding African transactional settings. The current funding positions the company to test whether this operational success can be converted into large enterprise contracts in Europe. If Locstat can demonstrate clear reductions in fraud and false positives for EU customers, it will be ideally placed for a much larger future raise and broader global expansion
Source: Disrupt Africa
