Permira Takes Majority Stake in BioCatch at $1.3bn Valuation

BioCatch to date has carried out only a small acqui-hire transaction in 2020, but with Permira’s backing it wants to pursue acquisitions that help with detecting generative AI-based impersonation attacks or other common types of AI-enabled fraud, Mazor said. As fraudsters use AI to more convincingly mimic users, Mazor said technologies and strategies are needed that can distinguish between human and bot.

“Gen AI is more of a threat in our space than the use of gen AI for defensive technologies,” Mazor said. “Our approach is to basically protect the end user from being fooled by gen AI. And that’s a component that we find interesting potentially in M&A.”

Mazor said BioCatch’s use of behavioral biometrics to monitor user behavior and detect fraudulent activity is a key differentiator in the market. Unlike other types of controls such as passwords or two-factor authentication, biometrics offer comprehensive security without adding friction to the user’s experience since it relies on passive monitoring to secure digital transactions, he said,

“Looking at the behavior of the user passively is the only way that both increases the security as well as having nothing to do in terms putting more hurdles or more friction in the journey,” Mazor said.

BioCatch goes up against providers focused on transaction monitoring, device signals and location signals in the broader online fraud detection market, but none of the company’s rivals focuses heavily on behavioral biometrics, according to Mazor. The company has 99% gross dollar retention and 125% net dollar retention, which Mazor said demonstrates strong customer loyalty and existing customer growth (see: LexisNexis, Experian, IBM, F5 Top Fraud Reduction Tech).