Verafin $515mn equity funding aims to boost fraud detection services
Verafin Inc has announced it has secured CA$515mn towards debt and equity financing as the firm seeks to encourage growth among larger banks.
Verafin, a St-John’s based crime management software company with a client portfolio spanning almost 3,000 financial institutions across North America, believes the agreement is one of the largest transactions in the Canadian software sector.
The half-billion-dollar sum comes from Toronto-based Information Venture Partners along with Spectrum Equity, based in Boston.
“This financing round with our long-term partners Spectrum Equity and IVP allows Verafin to accelerate our investments in product innovation and customer success,” said Jamie King, Verafin CEO in a statement. The company will “continue our progress in market penetration of larger financial institutions,” King said.
Verafin opened its doors in 2003 after its founders Jamie King, Raymond Pretty and Brendan Brothers began adapting robotics developed for the mining industry. In the last 18 months, the business has seen 25 new financial institutions, with a combined valuation of $5bn, sign up to Verafin services. According to the company, it has doubled sales bookings and average deal value since 2017. The new refinancing makes Verafin founders the largest shareholder group in the organisation.
Newfoundland and Labrador-based Spectrum Equity provides financial support to internet software and ICT service companies from a US$1.25bn fund, the eighth fund released by the firm. It will continue to back Verafin’s “product-innovation led go-to-market strategy that has enabled the company’s explosive growth,” said Chris Mitchell, Spectrum Equity managing director.,
“Verafin is in the very early innings of its mission to create the world’s most effective crime fighting network,” commented Dave Unsworth, general partner at Information Venture Partners, IVP focuses on investing in early-stage companies in financial technology and cloud-hosted software from its second fund with $106mn, according to its website.
“We see a massive opportunity ahead for Verafin to continue to lead this market transformation through continued product innovation and thought leadership,” added Unsworth.