US growth firm Level Equity buys significant Eftsure stake

Published in the Australian Financial Review

Fresh from helping set a record for the country’s biggest VC deal with simPro last month, New York-based growth investor Level Equity has placed another big Aussie bet.

It’s understood to have taken a significant stake in anti-fraud payment technology company Eftsure, following a sale process run by Geoff Levy’s Monash Advisory for the past five months.

Eftsure was hoping for a deal in the range of 10 times revenue, which would place the value at $100 million-odd, and sources suggest these expectations had been met.

Eftsure’s technology enables users to ensure a payees’ account name, number and BSB all match.

The deal is being positioned as a significant growth investment, with local backer OIF Ventures (which first invested in 2017) selling down the bulk of its stake and fetching a return that delivers a 60 per cent-odd return on its first $50 million fund.

It’s the second big win for OIF in as many weeks, having netted itself a so-called “dragon” (a return on investment that returns a whole fund) when Schwarz Group bought Israeli cyber security company XM Cyber for $US700 million.

Founded by former accountant Ian Mirels, CEO Mike Kontorovich and Mark Chazan in mid-2014, its has gone from $200,000 in annual recurring revenue in 2017 to around $10 million.

It has more than 2.5 million independently verified accounts in its database and more than 500 Australian customers including universities, government departments, Pizza Hut and 7-Eleven.

“The partnership with Level Equity will allow us to focus on expanding the capabilities of our platform and support investment in marketing and distribution to scale the delivery of our service,” Kontorovich said.

Level Equity, which has $US2.7 billion in assets under management, was also part of simPRO’s mega $US350 million round last month, which was led by K1 Investment Management.

Level Equity principal Gautam Gupta is set to join the Eftsure board.

OIF founding partner Jerry Stesel said he was confident Level Equity would be a good partner for Eftsure.

“Working closely with Level Equity at another of our portfolio companies, Instaclustr, we know that the team at Level Equity are exceptional partners for the business going forward,” he said.