UK private equity firm Permira has acquired control in digital fraud and financial crime protection company BioCatch, the Israeli company has announced. Permira is buying a 57% stake from US venture capital firms Bain Capital Tech Opportunities and Maverick Ventures, in a secondary transaction valuing BioCatch at a total enterprise valuation of $1.3 billion.
The deal reflects a rise in valuation for BioCatch. According to PitchBook, three secondary deals have taken place over the past year valuing the company at $1 billion. In those deals in November 2023 and February 2024, which were not reported by the media, anonymous investors sold shares for $140 million to Permira, Sapphire and Cyverse Capital.
For Bain Capital and Maverick Ventures the deal brings handsome returns. The two funds led a $168 million financing round in BioCatch together with other investors at a company valuation of just $232 million in 2020. In 2018 Maverick led a $30 million investment round at a company valuation of $133 million.
BioCatch has raised $230 million to date
According to PitchBook, Maverick invested $13 million in BioCatch. In total BioCatch has raised more than $230 million from a wide range of investors including Barclays, Citi and HSBC. "Globes" understands that BioCatch is expected to hold a flotation on Nasdaq in the next two years.
Permira has previously acquired two Israeli companies - NDS and Netafim.
BioCatch was founded in 2011 by Avi Turgeman and the late Benny Rosenbaum. The current CEO is Gadi Mazor. The company has developed a platform for managing user identities based on biological parameters like mouse movement and individual surfing patterns. Last year the company entered the financial crime prevention field by launching a product that offers a more proactive approach to bank account identification to protect against fraud.
BioCatch has reported 43% growth in annual recurring revenue (ARR) and according to the company annual revenue will cross the $100 million threshold by the end of the year and will be profitable in EBITDA terms.
Mazor said, "After building a strong partnership with Permira over the last year, we are delighted to welcome them as majority shareholders. 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."
Published by Globes, Israel business news - en.globes.co.il - on May 2, 2024.
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