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

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Digital fraud detection company BioCatch has a new majority shareholder: U.K-based private equity firm, Permira, is acquiring shares in the company “primarily” from existing investors including Bain Capital, Maverick Ventures, and Tech Opportunities, in a secondary market transaction that values BioCatch at $1.3 billion.

Existing shareholders Sapphire Ventures and Macquarie Capital are also increasing their stake in BioCatch, though the firms did not mention by how much. Permira also refused to confirm how much of a majority stake it now has in BioCatch.

This is the second notable private equity deal that’s been announced in the cybersecurity space in less than a week. Thoma Bravo last Friday said it was planning to buy Darktrace in a $5 billion deal that would see the U.K. cybersecurity company taken private.

Permira last year acquired a “significant minority stake” in BioCatch in a similar secondary market deal with existing investors, and became the company’s No. 3 shareholder after Bain and Maverick. BioCatch crossed the $1 billion valuation mark at that juncture, according to reports at the time, meaning that investors have hiked their valuation of the Israeli cybersecurity company since then.

Founded in 2011, Tel Aviv-based BioCatch develops technology that helps companies such as banks track users’ online behavior to establish whether a customer is real or a fraudster. This can help identify, for example, bots attempting to gain access to online bank accounts through strategies like “credential stuffing.”

The company has raised well over $200 million to date, including tranches from financial giants such as American Express, HSBC, Barclays, Citi and National Australia Bank.

This most recent deal represents Permira’s biggest known transaction since it took email security firm Mimecast private for $5.8 billion a little over two years ago. Permira says it will use its investment and position as majority shareholder to bring a “growth mindset” to BioCatch, with plans to expand further across Europe.

“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 Growth Opportunities’ partner and co-head, said in a press 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.”

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