British Fraud Detection Company in Advanced Talks for Sale to Visa
A highly successful British fraud detection company, backed by the late technology entrepreneur Mike Lynch, is currently in advanced negotiations for a sale to American payments giant Visa. The potential deal is estimated to be worth hundreds of millions of pounds.
Featurespace, founded in 2008 and headquartered in Cambridge, has caught the attention of Visa and discussions are currently ongoing. While there is no official agreement in place, sources close to the matter have revealed that the deal could be worth more than £700m. However, another source has suggested that the final value may be lower.
Despite the promising negotiations, sources have also cautioned that the deal is still not finalized and could potentially fall apart.
The news of a potential sale comes just days after the tragic death of Mike Lynch, who passed away on the superyacht Bayesian, which he owned. Alongside Lynch, his daughter Hannah and five others, including former Prudential chief executive Jonathan Bloomer, also lost their lives in the accident.
One investor has remarked that the sale to Featurespace would once again highlight the crucial role that Lynch played in supporting successful British start-ups. Through his investment firm Invoke Capital, Lynch held a small stake in Featurespace and served as a non-executive director for 11 years.
Invoke Capital is said to have reduced its interest in recent years to fund the legal battle that ultimately ended in Lynch’s acquittal of fraud charges. The charges were related to the sale of Autonomy, the software company that Lynch founded, to Hewlett-Packard in 2011.
In a tribute to Lynch, Featurespace expressed their deep sorrow over his passing and acknowledged his significant contributions to the company. They stated, “It is a high statistical probability that Featurespace wouldn’t be a thriving technology company without Mike.”
The company’s co-founders, Professor Bill Fitzgerald and Dave Excell, were greatly inspired by Lynch’s intellect and commercial acumen. They were fortunate to have his friendship and guidance throughout the years. Lynch’s personal investment in Featurespace also played a crucial role in the development of their revolutionary technology, which has been integral to the advancement of artificial intelligence.
Featurespace specializes in fraud detection and has a prominent list of clients, including major banks such as HSBC, NatWest Group, and Worldpay. They also serve clients outside the banking sector, such as Betfair, which is owned by Flutter Entertainment.
With the rise in financial scams and the increasing sophistication of fraud methods, the demand for Featurespace’s services has grown significantly. Their Adaptive Behavioural Analytics software, which uses machine learning, is currently used in over 180 countries to detect and prevent fraud.
The company is led by CEO Martina King, a former executive of Yahoo! and Guardian Media Group. In order to fund their growth and development, Featurespace has raised approximately £100m in funding from various investors.
Among their shareholders are prominent early-stage investors such as Insight Venture Partners, IP Group, Chrysalis, Mission OG, and Highland Europe. Lynch also played a crucial role in the establishment of Darktrace, a cybersecurity company that recently agreed to a £4.25bn takeover by Thoma Bravo, a private equity firm.
In light of recent events, Italian prosecutors have announced that they are considering manslaughter charges as part of their investigation into the sinking of the Bayesian.
When approached for comments, Visa stated that they do not comment on speculation. Invoke declined to comment, and Featurespace did not respond to requests for comment.
