BioCatch says investment firm Permira has acquired a “significant” stake in its fraud detection company. The company, which has offices in New York and Tel Aviv, announced Permira’s acquisition Wednesday (May 3), noting it was now BioCatch’s third largest shareholder after Bain Capital and Maverick Capital. “We look to back product-first businesses operating in structurally […]
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BioCatch says investment firm Permira has acquired a “significant” stake in its fraud detection company.
The company, which has offices in New York and Tel Aviv, announced Permira’s acquisition Wednesday (May 3), noting it was now BioCatch’s third largest shareholder after Bain Capital and Maverick Capital.
“We look to back product-first businesses operating in structurally growing end markets and that have management teams with the ambition to scale and grow their business,” said Ran Maidan, Permira senior adviser and head of the company’s operations in Israel.
“We found all of that in BioCatch and believe it is the clear leader in the most critical layer in online fraud detection — behavioral biometrics.”
Founded in 2011, BioCatch uses artificial intelligence and machine learning technology to collect data signals, analyze a user’s cognitive intent, and deliver insights as to the legitimacy of their identity and behavior.
With Permira on board, the company says it plans to “focus on accelerating opportunities for geographical expansion, product innovation,” as well as potential mergers and acquisitions.
The announcement comes as businesses are dealing with a surge in fraud attempts, according to research in the May report, “Real-Time Payments Tracker: Fighting Fraud in Real-Time Payments,” a collaboration between PYMNTS and The Clearing House.
The study found that the number of attempted fraud transactions jumped by 92% between 2021 and 2022, with the dollar amount for these attempts spiking by an incredible 142%.
“That’s because as the payment landscape becomes faster, easier and more digital, cybercriminals are staying in step with the pace of innovation themselves by updating historical fraud methodologies to improve the effectiveness of their methods while simultaneously leveraging emergent modern tools like generative artificial intelligence (AI) for new attack strategies,” PYMNTS wrote Wednesday.
Another PYMNTS report “The State of Fraud and Financial Crime in the U.S.,” compiled in collaboration with Featurespace, found that the total dollar cost of fraud is expected to rise in the years ahead, as scams and other fraudulent crimes increase.
“It’s a continuous spectrum,” Michael Jabbara, global head of fraud services at Visa, said in an interview with PYMNTS earlier this year. “[Businesses need to] think about every interaction across multiple dimensions and think strategically about the appropriate safeguards to put in place to reduce potential incidents of fraud.”
Meanwhile, biometrics are the most preferred authentication method for more than 50% of American consumers surveyed by PYMNTS.
Our research found that 52% of consumers who use biometrics prefer the authentication compared to other options, while just 25% of consumers who use passwords feel positive about passwords.
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