Visa acquires Israeli fraud prevention company BioCatch for $2.4 billion
The company, which is being purchased from private equity firm Permira, develops technology that helps financial institutions detect fraud before transactions take place.
Visa is acquiring Israeli fraud prevention company BioCatch for $2.4 billion in cash, two years after private equity firm Permira acquired control of the company in a deal that valued BioCatch at approximately $1.3 billion.
BioCatch, which developed behavioral biometric technology for detecting and preventing fraud in the banking system, has experienced rapid growth in recent years, transforming itself from a relatively small cybersecurity company into a major player in the global fight against financial crime.
The company was founded in 2011 by the late Avi Turgeman and Benny Rosenbaum. Its growth accelerated after Gadi Mazor was appointed CEO in 2018. At the time, BioCatch generated approximately $7 million in annual revenue and was valued at around $100 million. By 2023, the company had grown its annual recurring revenue (ARR) to $100 million, following 49% growth that year.
BioCatch has developed an AI and machine learning-based platform that uses behavioral biometrics to identify and prevent fraud, account takeovers, scams, money laundering, and application fraud. The technology analyzes thousands of signals from user behavior, devices, applications, and networks, including typing patterns, touch gestures, device handling, and other digital interactions, to distinguish legitimate users from criminals in real time.
Visa said the acquisition will strengthen its cybersecurity, fraud prevention, risk management, and identity solutions by helping financial institutions detect threats earlier, before fraudulent transactions occur.
BioCatch currently protects 1.8 billion devices and 760 million users worldwide, serving more than 350 banking customers across 21 countries, including more than 100 of the world's largest banks.
Visa said that account takeovers and scams cost the global economy more than $1 trillion annually, while AI technologies are making such attacks increasingly sophisticated and scalable. Over the past five years, Visa has invested more than $13 billion in technology and infrastructure to protect its payments ecosystem and reduce fraud.
"Account takeovers and scams cost the global economy over $1 trillion annually and AI is enabling these attacks at unprecedented scale," said Andrew Torre, president of value-added services at Visa. "BioCatch will help our clients stop fraud before it reaches the point of payment."
The acquisition represents a rapid return for Permira, which acquired a controlling stake in BioCatch just two years ago in a transaction led by Ran Maidan, the firm's Israeli partner. Permira invested approximately $750 million for a 60% stake in the company. The current transaction includes the acquisition of shares from Permira funds and other shareholders.
The deal is expected to close by the end of Visa's fiscal second quarter of 2027, subject to regulatory approvals.
According to BioCatch CEO Gadi Mazor, the acquisition is not expected to fundamentally change the company's operations, and he is expected to remain in his position.
"Real-time insights into customer intent continue to grow increasingly essential for institutions to establish trust within digital banking sessions," Mazor said. "For more than a decade, we've demonstrated behavior's unique ability to distinguish the criminal from the legitimate."
