Sydney startup Apate.AI raises $11.4M for AI fraud detection

Sydney cybersecurity startup Apate.AI has raised $11.4 million in a seed funding round led by Lobby Capital, marking one of the largest early-stage raises in the Australian security sector this year.

The company develops adversarial conversational AI agents that mimic potential victims to infiltrate fraud networks, waste scammers' time, and extract real-time intelligence for banks, telecommunications providers, and government entities.

Co-founder and CEO Professor Dali Kaafar said the technology gives defenders a proactive advantage against increasingly sophisticated fraud operations. "Our agents interact directly with scammers, consume their time and resources, and turn the techniques they reveal into intelligence that protects their intended targets," Kaafar said.

The round included participation from OIF Ventures, Investible, Concept Ventures, and Baobab Ventures. The company has incorporated a Delaware-based entity to facilitate North American market entry and is opening a London office to serve European institutions, while retaining its research and technology operations in Sydney.

Apate.AI's platform deploys armies of voice and text-based conversational AI agents that engage with scammers in real time. The system studies language, behaviour, and operational methods during each interaction, converting those exchanges into actionable intelligence for financial institutions.

The funding will support international expansion and further platform development. The company plans to establish commercial relationships with banks, telecom operators, government bodies, and other prospective customers in North America and Europe.

Professor Kaafar, a UNSW researcher, founded the company alongside Peter Eckermann. The team has held early discussions with Amazon Web Services and JP Morgan about securing data centre infrastructure and financial systems.

The raise follows a broader trend of Australian cybersecurity startups attracting significant capital. Quantum Lock, a UNSW spinout using quantum physics for infrastructure security, secured $1.2 million in venture capital funding in August. Meanwhile, Upguard, a Tasmanian cybersecurity scaleup, pocketed $105 million in a Series C round earlier this year.

Apate.AI's approach addresses a growing global problem. The Australian Cyber Security Centre reported a 23 per cent increase in scam-related losses in 2025, with AI-generated deepfake voice calls and phishing campaigns becoming increasingly difficult to detect using traditional methods.

The company's Delaware incorporation and London office signal ambitions to compete with established fraud-intelligence platforms in the United States and United Kingdom, where regulatory requirements around scam prevention are tightening.