Investors allocate $21.7m to Featurespace

Featurespace, a UK-based adaptive behavioural analytics spinout from University of Cambridge, raised £16.5m ($21.7m) in funding yesterday from backers including Touchstone Innovations, the commercialisation firm spun out from Imperial College London.

The round was led by technology fund Highland Europe, with additional participation from payment processing firm Worldpay and investment firm Invoke Capital. Touchstone supplied £1.4m to the round and now holds a 27.9% stake in the spinout.

Featurespace has developed behavioural analytics software that uses machine learning to prevent fraud. The platform, Aric, is able to detect unusual behaviour in high-volume, real-time consumer interactions and thwarts fraudulent activities.

The money will allow the spinout to drive revenues through direct sales and partnership agreements. It will also support international expansion efforts, which the company has already launched with the opening of offices in New York and in North Carolina.

The technology is based on research by the late Bill Fitzgerald, who was head of signal processing and applied statistics at Cambridge, and his PhD candidate Dave Excell.

Featurespace previously obtained $9m in funding in June 2016 from Touchstone Innovations, then known as Imperial Innovations, TTV Capital and assorted private investors from Cambridge Angels as well as charity Nesta.

Touchstone earlier led a $5m funding round in 2014, with participation from Nesta and investors from Cambridge Angels.

In 2012, Touchstone had already contributed to a £1.5m round alongside Nesta, members of Cambridge Angels, Cambridge Capital Group and Mike Lynch, a non-executive director of Featurespace.

Martina King, CEO of Featurespace, said: “We are working with our clients to protect businesses and consumers in the fight against fraud. This funding round will enable us to continue to grow our business internationally, building on our progress as a leader in machine learning fraud prevention.”