Ethoca picks up $45 mln growth investment led by Spectrum Equity

Ethoca has raised US$45 million in a minority growth investment led by U.S. private equity firm Spectrum Equity. Based in Toronto, Ethoca is a provider of technology solutions that help credit card issuers and online merchants increase card acceptance and prevent e-commerce fraud. Founded in 2005, the company also has offices in Austin, Texas, London and Dublin. Ethoca, which more than tripled its revenue in 2014, said it plans to use the partnership with Spectrum to accelerate the next phase of its global expansion and deliver new collaboration-based services. Last year, Spectrum invested in Canadian financial security startup Verafin, which is also backed by Information Venture Partners.


Ethoca Secures USD $45 Million Growth Equity Investment Led by Spectrum Equity

Transaction Underscores Triple-Digit Growth Trajectory of Global Leader in Collaboration-Based Technology Solutions for Card Acceptance and Ecommerce Fraud Prevention

TORONTO & LONDON & AUSTIN, Texas–(BUSINESS WIRE)–Ethoca, the industry standard for collaboration-based technology solutions that help card issuers and online merchants increase card acceptance and stop ecommerce fraud, today announced a USD $45 million minority growth equity investment led by Spectrum Equity. Ethoca has achieved strong growth – including more than tripling its revenue in 2014 – by solving a significant problem in the ecommerce fraud prevention and card acceptance marketplace. Card issuers and merchants typically make decisions in isolation about which ecommerce transactions to accept or decline due to suspicion of fraud. Without sharing this vital intelligence, both parties make incorrect decisions.

The result is unnecessarily lost revenue, completely avoidable fraud losses, and dissatisfied customers who are either wrongly turned away or forced to endure the inconvenient, disruptive chargeback process. Ethoca’s collaboration platform and alerting technology is a simple and highly effective solution that helps card issuers and merchants each stop fraud that would otherwise go undetected by the other party, increase acceptance on good transactions that would otherwise be wrongly rejected due to suspicion of fraud and improve customer satisfaction.

The first service Ethoca launched on its collaboration platform – Ethoca Alerts – is a faster, more cost-effective and customer friendly alternative to the chargeback process. It provides an early warning on fraud and disputes that have already been confirmed by cardholders, giving merchants the opportunity to stop fraud, halt the delivery of goods and service, and issue refunds to avoid impending chargebacks. Card issuers who use the service benefit by avoiding chargeback processing costs and recovering fraud losses – including 3D Secure and low-value transaction write-offs – much more quickly, easily and inexpensively than ever before. As the clear leader in card issuer-merchant collaboration, participation in Ethoca’s global network is accelerating. Customers include seven of the top ten ecommerce merchants, the world’s largest digital goods brands, more than 80,000 enrolled merchant descriptors and 30 card issuers worldwide – including seven of the top nine U.S. issuers, 12 in EMEA (including eight in the UK), seven in Canada, a top five card issuer in South Africa and a top three card issuer in Australia. In addition, Ethoca’s rapidly developing relationships with card issuing service providers add more than 500 U.S. credit unions to the network. Continuing global expansion will take the Ethoca Network into many new territories in 2015 and 2016, including Germany, Spain, Portugal, Turkey, China, Southeast Asia, New Zealand, South Africa, Brazil and Mexico.

“We are excited to have Spectrum Equity working alongside Ethoca to help accelerate the next phase of our global expansion and the delivery of new collaboration-based services to meet growing customer demand,” said Andre Edelbrock, CEO & Co-Founder of Ethoca. “Importantly, Spectrum supports our mission of reaching what we call ‘maximum acceptance’ – a place where good customers are never turned away and everyone benefits from the financial rewards that result when ecommerce can simply be about commerce.”

“We have long been impressed by Ethoca’s standard-setting, collaboration-based approach to tackling ecommerce fraud,” said Spectrum Equity Managing Director Christopher Mitchell, who led the firm’s investment and has joined Ethoca’s board. “The Ethoca team has accomplished the rare feat of creating an entirely new, global ecommerce collaboration platform outside of the traditional card networks.”

“With payment card fraud a $13.9 billion problem globally, Ethoca is well positioned to build on its strong track record of issuer and merchant growth in this arena while further expanding the range of collaboration-based services it offers,” added Larry Klane, co-founding principal at Pivot Investment Partners, who also recently joined Ethoca’s Board of Directors.

About Ethoca

Ethoca is the leading, global provider of collaboration-based technology that enables card issuers, ecommerce merchants and online businesses to increase card acceptance, stop more fraud, recover lost revenue and eliminate chargebacks. Through the Ethoca Network – the first and only of its kind in the industry – we are closing the information gap between card issuers and merchants. This unique capability makes fraud intelligence and card acceptance insight available and actionable in real time. Our suite of services delivers significant revenue growth and cost saving opportunities to our card issuer and merchant customers around the world. Seven of the top ten ecommerce brands, seven of the top nine U.S. card issuers, two of the top five UK card issuers and more than 2,100 ecommerce businesses around the world rely on Ethoca solutions and the network that powers them.

To find out more, please visit us online at Ethoca’s Recent Awards In May 2015, Ethoca Alerts was awarded in two top categories at the CNP Awards held in conjunction with CNP Expo. The company won for Best Chargeback Management Program (Customer Choice) and Best Overall Fraud/Security Solution (Judges’ Choice). Learn more here.

About Spectrum Equity

Founded in 1994 with offices in Boston and San Francisco, Spectrum is a leading growth equity firm that provides capital and strategic support to its portfolio companies. Spectrum has invested in over 120 companies in the last 20 years – representative investments include, BATS, GrubHub,, Passport Health, RiskMetrics Group, Seisint, SurveyMonkey, Verafin and World-Check. For more information about Spectrum, including a complete list of investments, visit


Keith Briscoe, Direct +1-416-628-5052
Mobile +1-416-312-8105
Chief Marketing Officer,
Sard Verbinnen & Co
Matt Benson, 212-687-8080
David Isaacs, 415-618-8750

Photo courtesy of Shutterstock