Portuguese unicorn Feedzai buys Australian company Demyst for 100 million dollars

Portuguese technology company Feedzai, which specialises in detecting and preventing financial fraud, has bought Australian company DemystData in a deal valued at around 100 million dollars, according to sources familiar with the transaction.

The acquisition, announced this Wednesday, is the second in the history of the Portuguese unicorn (private company worth over a billion dollars) led by Nuno Sebastião, after the purchase of Revelock in 2021. The company did not provide details of the transaction.

“There’s no shortage of data in our industry”, said the CEO about the choice of Demyst. “The trick is how to access the right data as quickly as possible to be able to accelerate risk decisions with as few friction points as possible”, he added.

Sebastião emphasised that Demyst is “a leader” in accessing the necessary data, whether internal or external to companies, and that the combination with Feedzai’s artificial intelligence (AI) will allow it to use all the data to make better decisions.

“More broadly, this acquisition marks a crucial moment in Feedzai’s continued evolution from a data consumer to a data provider”, described the CEO.

On the DemystData side, which was founded in 2010 by Australian Mark Hookey and has its official headquarters in New York, the team will be integrated into Feedzai, which will now have access to the Zonic data management platform.

“External data is the next frontier of business impact for financial institutions, but it’s notoriously complex, involving a labyrinth of sources for KYC/AML [know your customer/anti-money laundering], identity, fraud, credit checks and compliance”, said Hookey when announcing the acquisition.

He promised that the two companies together will build “the most advanced solution” for opening customer accounts, fraud prevention and risk management. The issue of account opening is particularly important for banks because it is the first line of defence against financial crime, according to IDC analyst Ashish Kakar. The process has to be simple for the customer but guarantee the integrity of the financial system, he said.

“The addition of automated data orchestration to Feedzai’s risk management platform is a powerful combination”, commented Kakar, which should help regulators’ cause of reducing accounts that serve as “mules” for money transport and fraudulent schemes.

Feedzai, founded by Nuno Sebastião, Pedro Bizarro and Paulo Marques in Coimbra in 2011, became a “unicorn” in March 2021. It has ten international offices and more than 600 employees.