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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’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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Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
The United States Supreme Court called a Mississippi law banning abortion after 15 weeks constitutional on Friday, overturning the country’s founding abortion rights decision Roe v. Wade. The Supreme Court also upheld that there cannot be any restriction on how far into a pregnancy abortion can be banned.
When Politico first broke the news months before SCOTUS’s final ruling, a slew of bills entered Congress to protect data privacy and prevent the sale of data, which can be triangulated to see if a person has had an abortion or if they are seeking an abortion and have historically been used by antiabortion individuals who would collect this information during their free time.
Democratic lawmakers led by Congresswoman Anna Eshoo called on Google to stop collecting location data. The chair of the Federal Trade Commission has long voiced plans for the agency to prevent data collection. A week after the news, California Assembly passed A.B. 2091, a law that would prevent insurance companies and medical providers from sharing information in abortion-related cases (the state Senate is scheduled to deliberate on it in five days).
These scattered bills attempt to do what health privacy laws do not. The Health Insurance Portability and Accountability Act, or HIPAA, was established in 1996 when the Internet was still young and most people carried flip phones. The act declared health institutions were not allowed to share or disclose patients’ health information. Google, Apple and a slew of fertility and health apps are not covered under HIPAA, and fertility app data can be subpoenaed by law enforcement.
California’s Confidentiality of Medical Information Act (or CMIA), goes further than HIPAA by encompassing apps that store medical information under the broader umbrella of health institutions that include insurance companies and medical providers. And several how-tos on protecting data privacy during Roe v. Wade have been published in the hours of the announcement.
But reproductive rights organizations say data privacy alone cannot fix the problem. According to reproductive health policy think tank Guttmacher Institute, the closest state with abortion access to 1.3 million out-of-state women of reproductive age is California. One report from the UCLA Center on Reproductive Health, Law and Policy estimates as many as 9,400 people will travel to Los Angeles County every year to get abortions, and that number will grow as more states criminalize abortions.
“Moves,” our roundup of job changes in L.A. tech, is presented by Interchange.LA, dot.LA's recruiting and career platform connecting Southern California's most exciting companies with top tech talent. Create a free Interchange.LA profile here—and if you're looking for ways to supercharge your recruiting efforts, find out more about Interchange.LA's white-glove recruiting service by emailing Sharmineh O’Farrill Lewis (email@example.com). Please send job changes and personnel moves to firstname.lastname@example.org.
Advertising technology company OpenX Technologies appointed Geoff Wolinetz as senior vice president of demand platforms. Wolinetz was most recently senior vice president of growth at Chalice Custom Algorithms.
Remote health care infrastructure provider Getlabs hired Jaime LaFontaine as its vice president of business development. L.A.-based LaFontaine was previously director of business development for Alto Pharmacy.
Customer experience platform DISQO tapped Andrew Duke as its vice president of product, consumer applications. Duke previously served as Oracle’s senior director of strategy and product.
Media company Wheelhouse DNA named Michael Senzer as senior manager of Additive Creative, its newly launched digital talent management division. Senzer was previously vice president of business development at TalentX Entertainment.
Fintech lending platform Camino Financial hired Dana Rainford as vice president of people and talent. Rainford previously served as head of human resources at Westwood Financial.
Kourtney Day returned to entertainment company Jim Henson’s Creature Shop as senior director of business development. Day mostly recently served as business development manager for themed entertainment at Solomon Group.
In this week’s edition of “Raises”: An L.A.-based footwear company closed $100 million to boost its expansion into the global market, while there were Series A raises for local fintech, biotech and space startups.
Miracle Miles Group, an L.A.-based footwear company, raised a $100 million Series A funding round co-led by IDG Capital and Sequoia Capital China.
Deno, a San Diego-based software development startup, raised a $21 million Series A funding round led by Sequoia Capital.
Tapcheck, an L.A.-based financial wellness startup that helps workers access their paycheck before payday, raised a $20 million Series A funding round led by PeakSpan Capital.
Gemelli Biotech, an L.A.- and Raleigh, N.C.-based biotech startup focused on gastrointestinal diseases, raised a $19 million Series A financing round led by Blue Ox Healthcare Partners.
Epsilon3, an L.A.-based space operations software startup, raised a $15 million Series A funding round led by Lux Capital.
Global Premier Fertility, an Irvine-based fertility company, raised an $11 million Series C funding round led by Triangle Capital Corporation.
Vamstar, an L.A.- and London-based medical supply chain platform, raised a $9.5 million Series A funding round co-led by Alpha Intelligence Capital and Dutch Founders Fund.
System 9, an L.A.-based digital asset market-making firm focused on the crypto altcoin market, raised a $5.7 million Series A funding round led by Capital6 Eagle.
Myria, an L.A.-based online marketplace of luxury goods and services, raised a $4.3 million seed round from Y Combinator, Backend Capital, Cathexis Ventures and other angel investors.
Binarly, an L.A.-based firmware cybersecurity company, raised a $3.6 million seed round from WestWave Capital and Acrobator Ventures.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Decerry Donato (email@example.com).
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