The Idaho Statesman: Kount gets ‘monster’ $80 million investment

16-Dec-2015

Kount, a technology company that offers fraud detection services for businesses, says it has accepted an $80 million investment from one of the world’s largest private-equity firms, CVC Capital Partners.

The cash injection will allow Kount to add to its 65-employee roster and expand its global reach, CEO Brad Wiskirchen said. In addition to providing fraud protection services to U.S. companies such as New Balance, Spotify and Boise-based Bodybuilding.com, Kount already sells its services to companies in the United Kingdom, Europe, Latin American, Middle East and Asia, Wiskirchen said.

Kount’s management team will remain intact, Wiskirchen said Wednesday. While offering few details, he said the company would expand its offerings. and employee count, including at its Boise office.

“This investment will enable our teams to accelerate new product development, expand our sales and marketing efforts and focus on growing our international footprint,” he said in an email.

CVC Capital Partners secured commitments of more than $79 billion and operates 24 offices across the U.S., Europe, Asia and South America. CVC added Kount to its growth fund that invests between $50 million and $200 million in “middle-market, high-growth” companies in the software and technology-enabled business services sector.

For years, tech companies in the Treasure Valley have complained that, without any large investment firms in Idaho, they struggled to win the attention of the kind of firms in Silicon Valley and elsewhere that can invest tens of millions needed to support growing companies.

The Idaho Technology Council recently released a deal flow report cataloging sales and investment deals made in the state in the last two years. The report was an effort to appeal to investors to consider Idaho companies as growth opportunities by highlighting the investments already being made here.

The Kount deal is the largest in recent memory in Idaho and ranks among the largest private equity investment ever in an Idaho company, Council President Jay Larsen said. The investment outpaces an earlier announcement hailed as a victory for Idaho tech this year when Boise wireless router developer CradlePoint received a $48 million round led by private equity firm Sorenson Capital.

“This is a monster deal,” Larsen said.

Jason Glass, managing director of CVC’s growth portfolio, said the group targeted Kount in what it sees as a growth field. Citing reports, CVC expects the industry to expand from $9 billion to more than $21 billion in 2019.

“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,” Glass said in a news release.

Kount does not disclose profits or revenues. It has “very strong margins,” Wiskerchen said.

Kount is a subsidiary of Keynetics, a Boise company whose revenues topped $400 million in 2013, according to a leader of the Idaho Technology Council’s Software Alliance. Along with Kount, Keynetics is best known for Clickbank, another subsidiary that developed an online marketing engine. The three companies share headquarters off West Royal Boulevard in the Lusk Street neighborhood near Boise State University.

Keynetics was co-founded by Timothy Barber, Eileen Barber and Geoff Hoyl. Kount was founded by Timothy Barber. Wiskirchen serves as CEO of both companies.

Written by Zach Kyle for The Idaho Statesman.