BioCatch, a leader in digital fraud detection, is set to be acquired by Permira Growth Opportunities II, the PE arm of Permira.
The deal is set to bolster the company’s valuation to a substantial $1.3bn.
The acquisition involves Permira buying out shares primarily from Bain Capital Tech Opportunities and Maverick Ventures in a secondary transaction. Notably, alongside Permira’s investment, existing shareholders Sapphire Ventures and Macquarie Capital will also increase their stakes in BioCatch.
BioCatch stands out in the FinTech landscape with its pioneering work in fraud and money laundering detection through behavioral biometric intelligence. This innovative approach utilizes advanced machine learning techniques to differentiate between legitimate users and criminals who have illicitly accessed accounts. BioCatch’s technology analyses digital behavior patterns and cognitive guidance of retail banking customers, significantly enhancing the security of financial transactions without compromising privacy.
The new funds will primarily support BioCatch’s global expansion, the advancement of its product roadmap, and overall growth. As fraud attacks grow more sophisticated, BioCatch continues to gain momentum, having achieved a 49% increase in ARR during 2023 and surpassing the $100m ARR milestone while also reaching EBITDA profitability.
Additionally, with this transaction, BioCatch aims to further its mission in combating financial crimes by expanding its predictive behavior-based tools for detecting mule accounts, thereby preventing broader financial crimes before they occur.
“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. 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,” Permira Growth Opportunities Partner and Co-Head Stefan Dziarski 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 Tech Opportunities for their support over the last four years, which has been key in helping us establish our leadership position in the market,” BioCatch CEO Gadi Mazor added.
Permira had already made an initial minority investment in BioCatch in early 2023, marking the beginning of its journey as a shareholder, which has now culminated in them taking a majority position.
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