Imperial Innovations Group Regulatory News (IVO)

10 June 2014

Imperial Innovations Group plc

£3 million funding round for adaptive behavioural analytics business, Featurespace

Imperial Innovations Group plc (AIM: IVO or 'the Group' 'Innovations') has completed a £3 million investment round in behavioural analytics business, Featurespace. Innovations has invested £1.7 million in the round, with the balance coming from Nesta and a number of members of the Cambridge Angels group, including Dr Mike Lynch (former CEO and Founder of the Autonomy) and Andrew Hodson, who has a 20 year track record in Banking and Financial Services and was a former investor in DeepMind Technologies, a UK artificial intelligence start-up which was sold to Google in January 2014. As a result of this investment Innovations has a 22.1 per cent. equity stake (fully diluted) in the issued share capital of Featurespace.

Featurespace is pioneering a new form of data analysis "Adaptive Behavioural Analytics" which has the ability to predict what an individual or group will do next, based on an understanding of normal patterns of behaviour. The company has developed a behaviour analytics engine (ARIC) based on Bayesian statistics and research undertaken at Cambridge University by Professor Bill Fitzgerald and Featurespace CTO, David Excell.

ARIC allows the real-time tracking of both individual and group behaviour by using advanced proprietary algorithms to exploit the vast amounts of customer interaction data that many companies collect, to deliver insights that can help to detect and prevent fraud, and prevent customer churn.

Featurespace's Fraud Manager helps companies to spot new types of fraud as it occurs, in real time, thereby allowing organisations to reduce risk and operational costs while improving the customer experience. Through the ARIC engine, Featurespace's software develops an understanding of what is normal for each customer or group of customers, and constantly updates this understanding as new information or transactions occur.

By having a real-time understanding of normal or expected behaviour, it is able to detect unexpected transactions, regardless of whether that type of fraud has been seen before, or is a new form of fraudulent activity. It can also reduce the number of false positives by 60-80%, allowing companies to accept more transactions and increase revenue.

Featurespace's Churn Protector uses real-time analysis of customer data for the early detection of behaviour symptomatic of churning, thereby helping organisations to quickly take corrective action. This enables Featurespace's clients to retain each of their customers through individualised targeted marketing campaigns and thus increase revenues.

Featurespace has already closed deals for its fraud detection product with Zapp/Vocalink (leading provider of payment systems), Callcredit Information Group (experts in consumer information management) and Betfair (online gaming). The company is led by Martina King, formerly MD of Aurasma and Yahoo! Europe.

Jon Edington, Director of Technology Ventures, Imperial Innovations, said

"This is our second investment in Featurespace and we're excited to count the company among our leading software businesses. Featurespace's technology is based on world-leading research from Cambridge University and is supported by a great team."

Martina King, CEO of Featurespace, added

"Featurespace has made good commercial progress in the past 12 months and this investment will enable us to further expand our customer base across various market sectors."

Notes to editors

About Imperial Innovations - www.imperialinnovations.co.uk 

Imperial Innovations creates, builds and invests in pioneering technologies developed from the academic research of the UK's four leading Universities. The Group supports scientists and entrepreneurs in the commercialisation of their ideas and intellectual property by leading the formation of new companies, providing facilities in the early stages, providing investment and encouraging co-investment to accelerate development, providing operational expertise and recruiting high-calibre management teams. It also runs an Incubator in London that is the initial home for many of its technology spin-outs.

Originally formed as the Technology Transfer office for Imperial College - a role it still carries out today, Innovations also invests in opportunities arising from intellectual property developed at, or associated with, Cambridge University, Oxford University and University College London. These are the top four research intensive universities in Europe with a research income of over £1.3 billion per annum.

Innovations invests in the most promising opportunities from whichever technology sector they arise, but has built particular expertise in the key sectors of: therapeutics, medtech, engineering and materials, and ICT.

During the period from the admission of its shares to trading on AIM in 2006 to 31 January 2014, Innovations has invested a total of £160.9 million across its portfolio companies, which have raised collectively investment of over £750.0 million.