Touchstone Innovations plc (AIM: IVO, ‘the Group’, ‘Touchstone’) has participated in a £16.5m funding round in Featurespace Limited (“Featurespace” or “the Company”), a leading machine-learning, fraud prevention company.
Touchstone has committed £1.4 million to the round, which was led by Highland Europe. The round was also supported by Worldpay Group plc, a leading global payment processing company, and Invoke Capital, a technology investment company. The new funding will enable Featurespace to drive revenues of its product platform and to continue to expand internationally.
Following this new investment, Touchstone will hold a 27.9% interest in the Company. The current valuation, including this investment is £15.6 million.
Featurespace, based in Cambridge, is an Adaptive Behavioural Analytics company that is addressing the fast-growing fraud detection and prevention market. According to MarketsandMarkets, this market was worth $14.8bn in 2014 and is growing at 18% per annum.
The Company has developed a machine learning software platform, ARIC™, that identifies abnormal behaviour in high-volume, real-time customer interactions. Through analysing every individual customer interaction and understanding normal behaviour, Featurespace helps to protect customers from fraud attack, and reduces the costs of lost transactions.
Featurespace has developed an ambitious growth plan, which focuses on expanding further within the UK and the USA. The business recently opened offices in North Carolina and New York, and last year signed a deal with TSYS, one of the largest payments processors in the US, in which Featurespace’s adaptive behavioural analytics platform is being used to reduce fraud for TSYS’ clients. The injection of new capital from this funding round will enable the Company to pursue further sales through this channel as well as direct sales to new customers in both existing and new markets.
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.”
Jon Edington, Director of Technology Ventures at Touchstone Innovations, added:
“Featurespace is a business with world-class machine-learning technology married to a management team with an excellent track record, and has the potential to be a substantial international entity.
“The evolution and development of Featurespace is a classic example of our approach.
“We initially worked with the late Professor Bill Fitzgerald who was head of signal processing and applied statistics at the University of Cambridge and Dave Excell, his PhD student, to develop the technology and concept and made our initial investment into the Company in 2012.
“Subsequently, we have continued to support the business with further funding as well as helping to recruit the management team with the right expertise and experience.
“More recently we have sought to build a strong syndicate around the business, widening the pool of investors and bringing in industry expertise.
“Today’s news reflects the growing maturity of the business and its potential for growth.”