Goldfinch backs Vesta as shift to e-commerce and fraud accelerates

Goldfinch Partners, a new PE player with a focus on digital transformation technologies, has injected $125 million in fraud-protection and guaranteed-payment-provider Vesta, the firm told PE Hub.

Vesta, based in Oregon, specializes in processing and guaranteeing card-not-present (CNP) payment transactions.

The company has become especially relevant during covid-19 due to the acceleration of e-commerce usage, the firm’s co-founders Bill McNichols and Sean Collins told PE Hub.

“Vesta’s business has become more mission-critical to large merchants as more and more commerce shifts to online channels during covid-19,” McNichols said. “We think that over time the world [will] move away from cash and more transactions will occur in digital wallets or in card-not-present transactions.”

According to Collins, as more retailers have turned online, more incidents of fraud have emerged too. “All of these themes add as catalyst or accelerators for Vesta and we expect that this will proceed for the foreseeable future,” the investor said.

The company, whose clients include AT&T, T-Mobile, Vodafone and Western Union, will use the new injection to recapitalize its debt and continue the expansion of the company’s suite of product offerings.

Vesta is the third investment for Goldfinch Partners, a private equity firm established 15 months ago by McNichols and Collins, a former Starbucks exec and BCG Ventures’ co-founder, respectively.

The investors co-manage the firm out of its dual headquarters in Seattle and San Francisco.

Goldfinch is focused on investments in mid-market technology companies that are poised to help the world’s largest businesses capitalize on digital transformation. Those businesses can operate across multiple verticals, including marketing, supply chain, fintech, and human capital, the co-founders said.

The firm is biased toward control deals, but is open to doing growth investments as well, with equity checks ranging from $30 million to $160 million per investment, McNichols and Collins said.

The firm previously participated in the Series B fundraising for Bakkt, a crypto asset exchange platform, and in the Series E fundraising for Catalant, an HR software-as-a-service business.

Altogether, Goldfinch has invested under $160 million in equity across three investments. The funds came from institutional investors and wealthy individuals that have relationships with Goldfinch.

Goldfinch started fundraising for its first fund pre-covid, but put its fundraising efforts on pause when the crisis hit. The firm is now ready to resume the fundraising, McNichols said.

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