Business Growth Fund invests alongside Octopus
Semafone, a UK company specialising in fraud prevention software used by call centres taking payments over the phone, is looking to increase the size of its operations following a £4m growth capital investment from BGF (Business Growth Fund), and a further £1m from Octopus Investments and other existing shareholders.
BGF, an independent company established to help the UK’s growing businesses, is investing in Semafone to support delivery of recent large contract wins and expansion in overseas markets.
Semafone’s DTMF masking payment method is patented in the US and UK and allows call centre operators and other businesses taking payments by phone to reduce Payment Card Industry Data Security Standard (PCI DSS) compliance costs by up to 80 percent. The technology anonymises sensitive credit and debit card details as they are keyed in by the customer during a telephone transaction and sends them directly to the bank, by-passing the call centre itself. Semafone also allows the call centre agent to maintain a dialogue with the customer during the transaction process, which reduces abandonment rates and provides a better customer experience than a fully automated service.
Based in Guildford, Semafone employs a team of 38 and was founded by David Jackson and Charles Cooper-Driver in 2009; the board of directors is chaired by David Sear who is also group chief commercial officer at global payment specialist Skrill. The business, which has turnover of circa £5m, is on a high growth trajectory. In May 2014, Semafone became the first vendor to achieve three of the highest levels of accreditation in the payment security industry, PA-DSS, PCI Level 1 certification and being a registered Visa merchant agent.
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Semafone’ s software is used by a host of blue-chip customers including Sky, Virgin Holidays, Talk Talk, Aviva Canada and Capita. In October 2013, Semafone signed a partnership contract with BT which will see it become a core part of BT’s call centre technology offering for its corporate customers.
The market for Semafone’s product has grown strongly in recent years, driven by high profile data breaches around the world that have dented consumer confidence and the reputation of major companies. The most recent large-scale attack was in September 2014 on US retailer Home Depot, resulting in the theft of 56 million customer records with an estimated “street” value of $3 billion.
BGF has taken a minority stake and BGF Investment Director Alistair Brew has been appointed to the board with Investment Manager Will Gresty joining as Observer to the board.
Semafone is banked by Lloyds Banking Group.
Tim Critchley, CEO of Semafone, commented:
“We are very pleased to have BGF’s support during a pivotal period of growth. Our global collaboration with BT on the BT Secure Contact solution and our expanding customer base, which now reaches four continents, are placing unprecedented demands on the company’s resources. BGF’s investment will help us to deliver these projects successfully as we continue to fulfil our ambitious plans for expansion into the US and further afield.”
BGF Investment Director Alistair Brew said:
“Semafone is an incredibly exciting company with a market-leading product offering endorsed by major blue chip customers. It is on an impressive growth trajectory, driven by its innovative software and consistently high quality project delivery under Tim Critchley’s strong leadership.
“There is a clear vision for how Semafone will build on its successes to date both in the UK and overseas, and we are delighted to be co-investing alongside existing investors Octopus Investments, who have been long-term backers of the company, to help realise this plan.”
Simon Andrews, Octopus Non-Executive Director, Semafone, said:
“This new investment should allow Tim Critchley and the team at Semafone to accelerate development to take advantage of the substantial opportunities that exist for the Semafone payment platform globally and build on its growing presence in the North American market. Octopus was the first institutional investor into Semafone and we are pleased to continue supporting the business in this investment round.”