LA-Based Fraud Prevention Service TeleSign Will Go Public Via SPAC

Pat Maio
Pat Maio has held various reporting and editorial management positions over the past 25 years, having specialized in business and government reporting. He has held reporting jobs with the San Diego Union-Tribune, Orange County Register, Dow Jones News and other newspapers in Ohio, West Virginia, Maryland and Washington, D.C.
TeleSign’s chief executive Joe Burton gives a presentation.

TeleSign, a digital identity verification and fraud prevention company used by companies like TikTok and GoFundMe, plans to go public through a merger with a blank-check firm at an enterprise value of $1.3 billion.

The deal with North Atlantic Acquisition Corp. will raise proceeds of $487 million, including a $107.5 million investment by private investors, and is expected to spark a hiring frenzy, the Marina del Rey-based company announced on Thursday.

Companies as wide ranging as Alibaba and IBM use their software to complete internet transactions. The move aims to catapult TeleSign into the field of major players in the space alongside rivals like Cupertino-based Reston, Va.-based Neustar Inc.; Swiss-based Mitto AG and San Francisco-based cloud platform firm Twilio Inc.

The company is part of a merger mania wave in Los Angeles this year of startups that have joined blank check firms — technically known as special-purpose acquisition companies, or SPACs.

But regulatory concerns raised over how equity bought by private investors was treated on the books, has taken the steam out of the market.

TeleSign\u2019s chief executive Joe Burton

TeleSign’s chief executive Joe Burton

TeleSign looks to nearly triple annual revenue over the next four years and compete aggressively for domestic and international business.

“We do expect a substantial headcount gain in Marina del Rey and other locations around the world,” said TeleSign Chief Executive Joe Burton, in an interview. “The market for digital identity and customer engagement is exploding right now.”

TeleSign, which currently employs just under 500, expects to generate revenue of $391 million in 2021 and increase it to nearly $1.1 billion in 2026, Burton said.

“We did this to fuel that growth,” said Burton of its plans to go public.

The transaction is expected to close in the second quarter of 2022, with the company being renamed TeleSign Inc. as it is spun off into an independent business from parent Proximus Group, a Belgium telecom giant.

Proximus bought TeleSign in 2017, and will control a 66.5% stake in the company after TeleSign completes its merger with North Atlantic Acquisition, Burton explained.

“Of course, their plans to either keep or sell that will be their own business over time,” he said of Proximus’ stock position.

Prior to the Proximus acquisition, the 16-year-old company had raised about $78.4 million in venture funding from major investors like San Francisco-based Telstra Ventures; Boston-based Summit Partners; Santa Monica-based March Capital and Chicago-based Adams Street Partners.

TeleSign wants to take advantage of the fast-moving shift to consumer online transactions by becoming a publicly traded company. It’s why it has pursued the SPAC route, rather than the traditional initial public offering, or IPO, which can take more than a year (and can be more costly), Burton said.

The estimated total addressable market that Telesign competes in is expected to nearly triple from its 2019 level of $19 billion, to $55 billion by 2024.

“We live in the digital identity and customer engagement market, and it seems to have quite a lot of M&A activity. Our growth plan that we’ve laid out is organic – meaning we think we can compete with and grow at this rate without acquisitions,” Burton said.

“However, if we find something that could accelerate our plan, we are not scared to do so,” said the chief executive about future possibilities of making a bolt-on acquisition.”

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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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PCH Driven: Director Jason Wise Talks Wine, Documentaries, and His New Indie Streaming Service SOMMTV

Jamie Williams
­Jamie Williams is the host of the “PCH Driven” podcast, a show about Southern California entrepreneurs, innovators and its driven leaders on their road to success. The series celebrates and reveals the wonders of the human spirit and explores the motivations behind what drives us.
Jason Wise holding wine glass
Image courtesy of Jason Wise

Jason Wise may still consider himself a little kid, but the 33-year-old filmmaker is building an IMDB page that rivals colleagues twice his age.

As the director behind SOMM, SOMM2, SOMM3, and the upcoming SOMM4, Wise has made a career producing award-winning documentary films that peer deep into the wine industry in Southern California and around the world.

On this episode of the PCH Driven podcast, he talks about life growing up in Cleveland as a horrible student, filmmaking, Los Angeles and his latest entrepreneurial endeavor: A streaming service called SOMMTV that features–what else?–documentaries about wine.

The conversation covers some serious ground, but the themes of wine and film work to anchor the discussion, and Wise dispenses bits of sage filmmaking advice.

“With a documentary you can just start filming right now,” he says. “That’s how SOMM came about. I got tossed into that world during the frustration of trying to make a different film, and I just started filming it, because no one could stop me because I was paying for it myself. That’s the thing with docs,” or “The good thing about SOMM is that you can explain it in one sentence: ‘The hardest test in the world is about wine, and you’ve never heard about it.’”

…Or at least maybe you hadn’t before he made his first film. Now with three SOMM documentaries under his belt, Wise is nearing completion of “SOMM4: Cup of Salvation,” which examines the history of wine’s relationship with religion. Wise says it’s “a wild film,” that spans multiple countries, the Vatican and even an active warzone. As he puts it, the idea is to show that “wine is about every subject,” rather than “every subject is about wine.”

For Wise, the transition to launching his own streaming service came out of his frustration with existing platforms holding too much power over the value of the content he produces.

“Do we want Netflix to tell us what our projects are worth or do we want the audience to do that?” he asks.

But unlike giants in the space, SOMMTV has adopted a gradual approach of just adding small bits of content as they develop. Without the need to license 500 or 1,000 hours of programming, Wise has been able to basically bootstrap SOMMTV and provide short form content and other more experimental offerings that typically get passed over by the Hulus and Disneys of the world.

So far, he says, the experiment is working, and now Wise is looking to raise some serious capital to keep up with the voracious appetites of his subscribers.

“Send those VCs my way,” Wise jokes.

Subscribe to PCH Driven on Apple, Stitcher, Spotify, iHeart, Google or wherever you get your podcasts.

dot.LA reporter David Shultz contributed to this report.