Our Crowd portfolio company BioCatch, a global provider of digital fraud detection and financial crime prevention powered by behavioral biometric intelligence, this week announced that Permira Growth Opportunities II, a fund advised by global private equity firm Permira, has agreed to acquire a majority position in the company. Existing shareholders Sapphire Ventures and Macquarie Capital will also increase their investments in BioCatch.
Shareholders Sapphire Ventures and Macquarie Capital will also increase their holdings.
According to reports, BioCatsh has boosted its growth significantly in 2023 and moved into EBITDA profitability.
OurCrowd, a securities crowdfunding platform, first backed the firm in 2014. In total, OurCrowd enabled almost $20 million invested in BioCatch.
The fund will acquire a majority stake in BioCatch, buying out shares primarily from Bain Capital Tech Opportunities and Maverick Ventures, in a secondary transaction that will value the company at a total enterprise valuation of $1.3 billion.
BioCatch was founded in 2011 to fight fraud and keep users safe in online transactions without disrupting user experience. Today, the company leverages patented artificial intelligence, data science, and machine learning technology to analyze a user’s cognitive intent and deliver insights as to the legitimacy of their identity, motivations, and behavior.
In 2023, BioCatch expanded its mission to include a proactive approach to fighting financial crime with the launch of predictive, behavior-based mule account detection.
Permira, via its growth equity strategy, completed an initial minority investment in BioCatch in early 2023.
Today, BioCatch reports more than 190 financial institutions as customers globally, including more than 30 of the world’s largest 100 global banks.
It is hoped the move allows BioCatch to expand across Continental Europe, where Permira was first established nearly four decades ago.
“Permira has backed the theme of cybersecurity for several years, and within this, online fraud detection, customer identity and access management markets have become a clear focus,” said Stefan Dziarski, partner and co-head of Permira Growth Opportunities. “We have tracked BioCatch with enthusiasm for many years, and now having been a shareholder since early 2023, our conviction in the business, its growth potential, its technology leadership, and its management team continues to grow.
“We’re excited to become the company’s majority shareholder and look forward to a continued successful partnership with Gadi and the BioCatch team as we seek to further accelerate growth and expansion in the years to come.”
“After building a strong partnership with Permira over the last year, we are delighted to welcome them as majority shareholders,” CEO Gadi Mazor added. “The firm’s impressive experience within technology and cybersecurity, combined with their scale, global network, and our close working relationship, has been invaluable since their initial investment.
“We’re excited to take BioCatch to the next level together. I’d also like to thank Matthew Kinsella from Maverick Ventures and Dewey Awad from Bain Capital for their support over the last four years, which has been key in helping us establish our leadership position in the market.”
“We have had the privilege of partnering with BioCatch over the past four years and worked closely with Gadi and the BioCatch team to develop a long-term strategy to realize the business’s growth potential,” said Dewey Awad, a partner at Bain Capital. “Together, we drove several key initiatives aimed at augmenting BioCatch’s go-to-market strategy, team, and operations, all with the goal of protecting end-users and their most sensitive transactions. We believe the company is well-positioned to continue its growth journey under Gadi’s leadership and with Permira’s support.”
“At Permira, we are looking to back product-led businesses operating in structurally growing end markets and that have management teams with the ambition to scale and grow their business,” said Ran Maidan, Permira’s senior advisor and head for Israel. “We found all of that in BioCatch and were grateful to have the opportunity to make an initial investment in 2023. After a successful first year, we are delighted to take a majority stake in the business as it continues to grow at scale. With the full extent of Permira’s resources and experience at its disposal, we’re excited for what’s to come at BioCatch.”
OurCrowd allows smaller (accredited) investors to participate in private securities alongside larger funds and institutions.
It was not immediately clear if OurCrowd investors were exited on the transaction.
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