PYMNTS.com: Kount To Grow Global Footprint With $80M Investment
Kount, which aims to help businesses boost sales by reducing fraud, has announced its $80 million growth equity investment from CVC Capital Partners (via its CVC Growth Fund) to help grow its global footprint.
Besides expanding its international presence, the provider of online and mobile fraud detection and prevention solutions will use the funding to accelerate product innovation and enhance customer support services. Kount, a Boise, Idaho-based company, provides cloud-based fraud detection solutions that enable merchants to reduce fraudulent transactions made online and via mobile, while increasing revenue, by accepting more valid orders. Its business model is centered on reducing credit card chargebacks, improving customer satisfaction and reducing fraud.
Kount works across numerous sectors, including retail, financial services and gaming, touching billions of transactions. The company noted that its end-to-end solution is used by thousands of merchants, payment processors and payment service providers globally, including Chase Paymentech, PayPal-owned Braintree, New Balance, Spotify and Bodybuilding.com.
“Online merchants face greater fraud challenges than ever before,” said Brad Wiskirchen, Kount’s CEO. “CVC’s funding and strategic guidance will provide Kount with significant resources to continue investing in our industry-leading fraud prevention solutions and to deliver the tools our customers need to combat fraud every day. We’re excited to partner with CVC in our next stage of growth as we continue to develop the industry’s most effective and efficient online fraud prevention solution.”
What this investment shows, Wiskirchen said, is the opportunity in the space, noting that this investment is “one of the largest, if not the largest, private equity financing of anyone in the fraud control space.” The investment will not only be able to put “more feet on the ground in more markets,” but it will also be able to enhance its products across several verticals at a more rapid pace.
“There are a number of product enhancements that have been on our roadmap that will be accelerated now. You’ll see a lot of new features or enhancements to our products in 2016 as a direct result of this instead of spread out over the next couple years,” he said.
With industry data projecting that the fraud detection and prevention industry will swell from $9 billion to over $21 billion by 2019, it’s clear why companies like CVC Capital are investing in the space. A recent study from Kount, the 2015 Mobile Payments & Fraud Survey, suggests that many organizations are lagging behind compared to mobile fraud growth. In fact, over half (60 percent) of respondents said they were “uncertain if mobile fraud is growing at a faster, slower or equal pace as their overall mobile transaction volume.”
“The payments fraud and security industry is one that we have been actively targeting for a while, and we identified Kount as the obvious industry leader,” said Jason Glass, managing director at CVC Growth Partners. “Kount’s long track record of success in a rapidly expanding market will become even more critical to merchants and payment processors as mobile and Internet commerce grows.”