UK Firm Permira Acquires Majority Stake in Cybersecurity Company BioCatch

Digital fraud detection startup BioCatch hits $1.3B valuation as Permira buys majority stake

Digital Fraud Detection Startup BioCatch Valued at $1.3B

Israeli company, BioCatch, a pioneer in digital fraud detection, has reached a valuation of $1.3 billion. This milestone was achieved as Permira, a U.K.-based private equity firm, acquired a majority stake in the company. The shares were primarily purchased from existing investors, including Bain Capital, Maverick Ventures, and Tech Opportunities.

Strengthening Ownership

Existing shareholders such as Sapphire Ventures and Macquarie Capital are also increasing their stake in BioCatch. However, both the firms and Permira have not disclosed the specifics of these transactions, maintaining a level of corporate discretion.

Permira’s Growing Influence in Cybersecurity

This isn’t Permira’s first foray into the cybersecurity space. In fact, it’s the second notable private equity deal announced in this sector in less than a week. Earlier, Thoma Bravo announced its plans to acquire Darktrace, a U.K. cybersecurity company, in a $5 billion deal, further highlighting the growing trend of private equity firms investing in cybersecurity.

BioCatch’s Rise in Valuation

Permira had previously acquired a significant minority stake in BioCatch in a secondary market deal, becoming the third-largest shareholder after Bain and Maverick. At that time, BioCatch had crossed the $1 billion valuation mark. Therefore, this recent transaction indicates a significant hike in the company’s valuation.

Understanding BioCatch’s Technology

Founded in 2011, BioCatch is based in Tel Aviv. The company develops technology that enables businesses, such as banks, to track users’ online behavior. This technology is instrumental in establishing whether a user is genuine or a fraudster. For example, it can help identify bots trying to gain access to online bank accounts via strategies like “credential stuffing”.

Permira’s Future Plans for BioCatch

Permira has expressed its intention to use its majority stake in BioCatch to foster growth and expand the company’s presence across Europe. Stefan Dziarski, Permira Growth Opportunities’ partner and co-head, mentioned their long-standing interest in BioCatch and their strong belief in the company’s growth potential, technology leadership, and management team.

The acquisition of BioCatch signifies Permira’s ongoing commitment to investing in cybersecurity, particularly in areas such as online fraud detection and customer identity management. This deal represents one of Permira’s largest acquisitions in recent years, following the $10.2 billion purchase of Zendesk and the $5.8 billion acquisition of email security firm Mimecast.

With this renewed focus and financial backing, BioCatch is expected to continue its growth trajectory, bolstering its position as a leader in digital fraud detection. This move also underscores the increasing importance of cybersecurity in the digital age, with private equity firms playing a key role in harnessing and driving this growth.