Private Equity Firm Permira Acquires Majority Stake in Fraud Prevention Firm BioCatch

Private equity company Permira has acquired a majority stake in Israeli fraud/financial crime prevention provider BioCatch.

The agreement, announced Thursday (May 2), values BioCatch at $1.3 billion, and comes amid a rising demand for fraud prevention solutions. Permira’s acquisition comes almost exactly a year after the news that the company had purchased a minority stake in BioCatch.

“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,” Stefan Dziarski, Permira’s co-head and partner, said in a news release.

“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,” he added.

BioCatch was founded in 2011 — “at the dawn of a significant consumer shift from branch to online banking,” as the company put it — and provides biometric intelligence and fraud detection, leveraging artificial intelligence (AI), data science and machine learning technology to examine a user’s cognitive intent and deliver “insights as to the legitimacy of their identity, motivations and behavior.”

The acquisition comes as companies are wrestling with the best way to use technologies such as AI to combat fraud, as PYMNTS noted last week in a roundtable discussion with a group of payments experts: Chris Caruana, vice president of strategy at HawkAI; Ramon Ramirez, director of AML/KYC operations at Western Alliance Bancorporation; and Miguel Navarro, head of client identity verification and authentication at KeyBank.

Risk management poses a major challenge for financial institutions, Ramirez and Navarro told PYMNTS.

Navarro described it as the “defender’s dilemma,” where the bank must work to be successful 100% of the time against fraudsters — but the criminals need to be successful only once for illicit gain.

“There’s just so much data out there that for a human being to sift through it becomes an insurmountable task,” Ramirez said.

Elsewhere on the anti-fraud front, PYMNTS wrote earlier this week about findings from financial technology provider Adyen showing that payment fraud cost retailers $429 billion last year, with 45% of all businesses around the globe falling victim to fraudulent activity, cyberattacks or data leaks in 2023, a 32% increase over 2022’s figures.

PYMNTS Intelligence data also showed that about eight in 10 U.S. eCommerce merchants doing international business were hit by fraud in 2023, “and nearly all of them are committed to better fortifying their businesses against fraud as a result.”

Ninety-five percent of merchants surveyed for “Fraud Management in Online Transactions” said they have already begun enhancing their anti-fraud capabilities or plan to start doing so in the near future.