PE Firm Permira to Take Controlling Stake in BioCatch

Permira, a global private equity firm, plans to acquire a majority stake in BioCatch, at a valuation of $1.3 billion.

BioCatch, founded in 2011, is known for its behavioral biometrics technology for fraud detection and financial crime prevention. It has seen significant growth, most notably in 2023 when it achieved a 49 percent increase in Annual Recurring Revenue (ARR), surpassing $100 million and reaching EBITDA profitability.

Permira’s acquisition marks a major milestone for BioCatch, which now serves over 190 financial institutions worldwide, including more than 30 of the top 100 global banks.

The deal involves Permira buying out shares primarily from Bain Capital and Maverick Ventures, which had invested in BioCatch during its earlier valuation of around $300 million in 2020. Other shareholders, including Blumberg Capital and OurCrowd, were also approached by Permira to sell their stakes.

The acquisition by Permira is part of its strategic focus on enhancing its presence in the technology sector, leveraging a newly raised growth fund of $4 billion aimed at increasing investments in technology-driven companies.

Following the acquisition, BioCatch will remain operational under its current management, with plans to further expand its reach and capabilities, potentially through more mergers and acquisitions. In comments to the Israeli outlet CTech, Permira’s senior adviser, Ran Maidan, did not defer from getting politically topical, framing the deal in terms of his firm’s record of investments in Israeli companies.

“Permira’s previous investments in Israel contributed to the fact that there is no fear of carrying out the BioCatch deal in the midst of the war,” he said. “Biocatch will continue to grow here, pay taxes here and we will not take it out of the country. As long as Israel continues to produce innovation and entrepreneurship that characterize it, and investors see that one plus one can make three, they will continue to invest here.”

BioCatch’s technology uses machine learning to analyze user behavior patterns to prevent fraud. This includes monitoring various parameters like typing speed and mouse movements to differentiate between legitimate users and potential fraudsters. The technology has reportedly prevented losses of approximately $3.5 billion.

The company has also expanded its scope to include predictive behavior-based detection of financial crimes, enhancing its offerings as online financial threats grow more sophisticated.

Sources: CTech, BioCatch

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May 2, 2024 – by Cass Kennedy