Transaction represents one of the largest ever growth financings of a Canadian software business
St. John’s, Newfoundland - Verafin, the world’s largest financial crime management software company, announced today the completion of a C$515 million equity and debt recapitalization. Verafin has enjoyed
tremendous growth in recent years, and its long-term vision of fighting financial crime through collaboration and cross-institutional analysis is fast becoming the industry standard for fraud detection and anti-money laundering (AML) regulatory compliance. The recapitalization allows Verafin to aggressively pursue its growth plans while remaining an independent company.
New equity financing was provided by Spectrum Equity’s current investing fund and Information Venture Partners’ (IVP) new fund with participation by new backers Northleaf Capital Partners, BDC Capital and Teralys Capital. Senior debt financing for the transaction was led by Wells Fargo Capital Finance and included Scotiabank in the syndicate.
Following the transaction, Verafin co-founders, management and employees will collectively represent the largest shareholding group. A prior IVP fund provided initial venture capital financing for Verafin in 2009, and a prior Spectrum Equity fund led a substantial growth equity financing in 2014.
Verafin provides a cloud-based, secure software platform for Fraud Detection and Management, BSA/AML Compliance and Management, High-Risk Customer Management and Information Sharing. Nearly 3,000 banks and credit unions use Verafin to effectively fight financial crime and comply with regulations. Leveraging its unique big data intelligence, visual storytelling and collaborative investigation capabilities, Verafin significantly reduces false positive alerts, delivers context-rich insights and streamlines the daunting BSA/AML compliance processes that financial institutions face today.
The equity and debt financing follows a period of sustained and rapid growth at Verafin. During this time, the Company has achieved many financial and operational milestones:
“We are very excited to begin this new phase of Verafin’s journey. This financing round with our long-term partners Spectrum Equity and IVP allows Verafin to accelerate our investments in product innovation and customer success, and continue our progress in market penetration of larger financial institutions,” said Jamie King, CEO of Verafin.
Chris Mitchell, Managing Director at Spectrum Equity said, “We are thrilled to be renewing our partnership with Verafin via this new investment to support its next phase of growth. We look forward to working with Jamie and the rest of the Verafin team to continue to support their product-innovation led go-to-market strategy that has enabled the Company’s explosive growth.”
Dave Unsworth, General Partner at IVP added, “Verafin is in the very early innings of its mission to create the world’s most effective crime fighting network. We see a massive opportunity ahead for Verafin to continue to lead this market transformation through continued product innovation and thought leadership.”
Additional financial terms were not disclosed.
Houlihan Lokey served as the financial advisor to Verafin.