Featurespace authenticates $32.9m funding round

Featurespace, a UK-based fraud detection technology spinout from University of Cambridge, secured £25m ($32.9m) yesterday in a round that included a $5.4m investment from commercialisation firm IP Group.
Investment firm Insight Venture Partners and VC fund MissionOG co-led the round, which also featured Highland Europe, TTV Capital and Invoke Capital, in addition to private investor Robert Sansom.
IP Group’s shareholding in Featurespace amounts to 23.9% at a valuation of $38.6m following the transaction, and the firm expects to book a $12.6m unrealised fair value gain for its portfolio.
Founded in 2008, Featurespace has built a fraud detection and risk management software platform called Aric Fraud Hub that applies adaptive behavioural analytics to high volumes of consumer interactions, helping to uncover irregular financial actions in real time.
Clients currently using the software include banks, payment processors, merchant acquirers, insurance providers and gaming organisations. Featurespace will put funds from the round into international expansion in addition to further software development and product distribution.
The spinout had already captured $38m across four funding rounds, raising $21.7m in 2017 from investors including Touchstone Innovations, the Imperial College London commercialisation spinout that subsequently became part of IP Group.
Payment processing firm Worldpay and investment firm Invoke Capital also participated in the round, which was led by technology fund Highland Europe.
Touchstone Innovations, then known as Imperial Innovations, also backed a $9m round for Featurespace in 2016 along with charity Nesta, TTV Capital and private investors from syndicate Cambridge Angels, having led a $5m round two years before with commitments from Nesta and Cambridge Angels investors.
Jon Edington, a partner at IP Group focused on technology, said: “Featurespace has gone from strength to strength, having expanded within financial services, and is now working with a wide range of financial institutions across Europe and the US.
“The company has been recognised with a string of awards including The Queen’s Award for Enterprise Innovation as well as having been ranked in the Deloitte Fast 50 two years in a row and is a great example of a high growth technology asset that we have helped nurture.”