September 26, 2019
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On September 25, Verafin Inc. (Verafin), a software company from Newfoundland, announced it completed a $515 million equity and debt recapitalization. Verafin provides fraud-detection, anti-money-laundering, and compliance and management software to nearly 3,000 financial institutions. This financing set a record for the largest venture funding in Canadian history, and values the company at close to $1 billion. The company will use the proceeds to continue targeting larger financial institutions with its products.
Spectrum Equity and Information Venture Partners provided new equity financing in the deal, along with new backers Northleaf Capital Partners, BDC Capital and Teralys Capital. Wells Fargo Capital Finance led the senior debt financing. The deal keeps majority ownership of the company in Canada, and allows Verafin to remain an independent company. “This deal basically is a reset that gives us the freedom to execute on our plan to continue building the world’s largest crime-fighting network,” said Brendan Brothers, co-founder of Verafin.
The deal tops the previous record for Canadian venture financings, which occurred when two U.S. financiers invested $333 million in the legal software firm Themis Solutions Inc. (which operates as Clio). September continues to be a strong month for large financings of Canadian tech companies. The Verafin deal marks the fifth nine-figure venture deal disclosed this month. The Canadian tech ecosystem continues to produce marquee transactions.
Author: Matt McDonald