Israeli BioCatch sold for $2.4 billion in cash to Visa
The company developed a system for identifying and preventing fraud in the banking system using biometric and behavioral means. Only two years ago, BioCatch was sold to the Permira fund for $1.3 billion.
The Israeli company BioCatch is being sold for $2.4 billion in cash to Visa. To date, the company has raised $115 million from venture capital funds and private investors, and it employs about 400 people. This is one of the largest private deals in the Israeli high-tech sector to date.
This is the second time that BioCatch, managed by Gadi Mazor, has been sold, but this time all of the company's shares are being sold. Last March, the private equity fund Permira acquired control of the company at a valuation of $1.3 billion with the assistance of the Robyn and Wyndham funds. The current acquisition reflects an increase in value of over a billion dollars within a year and three months.
Among the early investors in the company are: Maverick Ventures, the Jerusalem-based investment group OurCrowd, Joule Ventures, Blumberg Capital, Elroel Capital, and Kreos, now under the control of BlackRock.
In the 2024 deal, Bain Capital and Maverick Ventures sold BioCatch shares totaling $750 million, and in return granted Permira control with 57% of the company's shares.
"The company is not going anywhere"
BioCatch, managed by Gadi Mazor, a former partner at OurCrowd, developed a system for managing user identities based on biological parameters such as mouse movements and individual browsing habits. Last year, the company also entered the financial crime prevention business by launching a product that offers a more proactive approach to identifying bank accounts used for fraud.
Last year, the private company reported a 43% growth in Annual Recurring Revenue (ARR), a figure used by young start-ups to indicate growth without disclosing accounting revenue data. According to BioCatch, by the end of 2023, the annual revenue rate crossed the $100 million mark, and the company moved to operational profitability before taxes and depreciation (EBITDA).
According to its announcement this afternoon (Monday), BioCatch protects 1.8 billion devices and 760 million users worldwide. It claims to serve more than 350 banks, including 100 of the largest in the world.
CEO Gadi Mazor stated in the announcement:
"The company is not going anywhere. After the acquisition, we will continue to operate as we have done, but now as part of Visa. I am also not going anywhere. With Visa, we will maintain our entire management team and our reporting structure, and we are excited to join its value-added services organization. We will continue to serve the same financial institutions as we always have: with market-leading technologies and service from a team of solutions engineers, threat analysts, conflict managers, and global consultants, all working in close collaboration with banking teams."
