KYC & Compliance Due Diligence

Background

A renewable energy company operating across EU and LATAM markets (generating over 2.5 TWh of clean energy annually, reducing CO₂ emissions by 1.8 million tons, with an investor ROI of 14%) commissioned KYC solutions for 10 energy equipment suppliers ahead of planned procurement contracts.

What We Did

We applied a tiered screening approach across all 10 suppliers, combining standard and enhanced know your customer services depending on each supplier's initial risk profile.The review covered corporate profile verification, sanctions list screening across major global regimes, identification of connections to Politically Exposed Persons, and adverse media analysis. Where ownership structures were complex or incomplete, we extended the know your client due diligence to trace beneficial owners and map affiliated entities.

Key Findings

The results were significantly worse than the client anticipated going in:

• 7 out of 10 suppliers were either directly under sanctions or carried confirmed links to PEPs — a majority of the proposed vendor pool
• Several of the flagged suppliers had documented negative reputational profiles in industry and financial media, compounding the direct sanctions exposure

Outcome

The client declined to proceed with any of the flagged suppliers. The early-stage KYC services review prevented the company from entering procurement relationships that would have triggered financial monitoring obligations and created serious regulatory and reputational exposure. Identifying the problem at the onboarding stage (before contracts were signed) meant the client could act cleanly and without consequences.

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Background

A venture fund specialising in dual-use and defence tech investments (with a portfolio of 30+ companies, including several with NATO government contracts and exitreturns exceeding 3.5x) commissioned a full reputational and operational due diligence of an early-stage defence startup prior to a potential investment

What We Did

We conducted a full-cycle investigative due diligence, covering business model validation, financial statement analysis, and verification of the investor pitch deck. The review included assessment of assets and the startup’s unique selling proposition (USP), as well as a physical and technical site inspection. In parallel, we carried out background checks on the founding team and key executives, analysing their professional history, legal exposure, and credibility of declared expertise.

Key Findings

The gap between the presented investment case and the actual state of the business was material:

• Reported financial performance diverged significantly from projected figures, without clear justification in industry and financial media, compounding the direct sanctions exposure
• The USP lacked clarity and differentiation, weakening the startup’s competitive positioning
• The founder carried potential legal exposure related to a non-compete agreement
• The business model relied heavily on a single, poorly defined use-case with no clear end user
• The management team lacked sufficient engineering expertise, with prior experience concentrated in marketing and finance
• No established business processes or quality control systems were in place.

Outcome

The client declined the investment. The identified legal risks, combined with operational weaknesses and limited technical capability, created an unacceptable risk profile. The due diligence allowed the fund to exit the opportunity at an early stage, avoiding potential financial loss and reputational exposure.