Verafin, a financial crime management software company, has collected CAD $515m ($388m) in a mix of equity and debt recapitalization.
The equity round was supplied by Spectrum Equity, Information Venture Partners (IVP), Northleaf Capital Partners, BDC Capital and Teralys Capital. The senior debt facility was led by Wells Fargo Capital Finance and also included Scotiabank.
Following the close of the deal, Verafin co-founders, management, and employees will collectively hold the largest shareholding group.
With the recapitalization, the RegTech will be able to “aggressively” pursue its growth plans while staying as an independent company.
The RegTech offers a cloud-based software platform for fraud detection and management, BSA/AML compliance, high-risk customer management and information sharing. Its technology analyses a customer and their activity and notifies a client whenever suspicious activity is detected.
Verafin uses big data intelligence, visual storytelling and collaborative investigation capabilities to lower false positive alerts, deliver context-rich insights, and streamline compliance.
This investment follows a period of strong growth for Verafin. The company has reached an annual recurring revenue of CAD $100m ($75m) in the first quarter of 2019, representing an 87% growth since the beginning of 2017.
The company has also signed 25 financial institutions with more than $5bn in assets over the last 18 months.
Verafin CEO Jamie King said, “We are very excited to begin this new phase of Verafin’s journey. This financing round with our long-term partners Spectrum Equity and IVP allows Verafin to accelerate our investments in product innovation and customer success and continue our progress in market penetration of larger financial institutions.”
Earlier in the year, United Bank chose Verafin’s BSA/AML and fraud detection software to improve its own protections.
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