Imperial Innovations Group Regulatory News (IVO)

4 October 2017

Touchstone Innovations plc

Touchstone invests £1.4m in £16.5m funding round in Featurespace, the machine learning fraud prevention company

Touchstone Innovations plc (AIM: IVO, 'the Group', 'Touchstone') has participated in a £16.5m funding round in Featurespace Limited ("Featurespace" or "the Company"), a leading machine-learning, fraud prevention company.

Touchstone has committed £1.4 million to the round, which was led by Highland Europe. The round was also supported by Worldpay Group plc, a leading global payment processing company, and Invoke Capital, a technology investment company. The new funding will enable Featurespace to drive revenues of its product platform and to continue to expand internationally.

Following this new investment, Touchstone will hold a 27.9% interest in the Company. The current valuation, including this investment is £15.6 million.

Featurespace, based in Cambridge, is an Adaptive Behavioural Analytics company that is addressing the fast-growing fraud detection and prevention market. According to MarketsandMarkets, this market was worth $14.8bn in 2014 and is growing at 18% per annum.

The Company has developed a machine learning software platform, ARIC™, that identifies abnormal behaviour in high-volume, real-time customer interactions. Through analysing every individual customer interaction and understanding normal behaviour, Featurespace helps to protect customers from fraud attack, and reduces the costs of lost transactions.

Featurespace has developed an ambitious growth plan, which focuses on expanding further within the UK and the USA. The business recently opened offices in North Carolina and New York, and last year signed a deal with TSYS, one of the largest payments processors in the US, in which Featurespace's adaptive behavioural analytics platform is being used to reduce fraud for TSYS' clients. The injection of new capital from this funding round will enable the Company to pursue further sales through this channel as well as direct sales to new customers in both existing and new markets.

Martina King, CEO of Featurespace, said:

"We are working with our clients to protect businesses and consumers in the fight against fraud. This funding round will enable us to continue to grow our business internationally, building on our progress as a leader in machine learning fraud prevention."

Jon Edington, Director of Technology Ventures at Touchstone Innovations, added:

"Featurespace is a business with world-class machine-learning technology married to a management team with an excellent track record, and has the potential to be a substantial international entity.

"The evolution and development of Featurespace is a classic example of our approach.

"We initially worked with the late Professor Bill Fitzgerald who was head of signal processing and applied statistics at the University of Cambridge and Dave Excell, his PhD student, to develop the technology and concept and made our initial investment into the Company in 2012.

"Subsequently, we have continued to support the business with further funding as well as helping to recruit the management team with the right expertise and experience.

"More recently we have sought to build a strong syndicate around the business, widening the pool of investors and bringing in industry expertise.

"Today's news reflects the growing maturity of the business and its potential for growth."

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For further information contact:

About Touchstone Innovations - www.touchstoneinnovations.com

Touchstone Innovations plc ("Touchstone" formerly Imperial Innovations Group plc) creates, builds and invests in pioneering technology companies and licensing opportunities developed from outstanding scientific research from the Golden Triangle, the region broadly bounded by London, Cambridge and Oxford.

This area has an unrivalled cluster of outstanding academic research and technology businesses, and is home to four of the world's top 10 universities, as well as leading research institutions, the cream of the UK's science and technology businesses and many of its leading investors.

Touchstone supports scientists and entrepreneurs in the commercialisation of their ideas through protecting and licensing out intellectual property (through its Technology Transfer subsidiary, Imperial Innovations Limited), by leading the formation of new companies, by recruiting high-calibre management teams and by providing investment and encouraging co-investment. Touchstone remains an active investor over the life of its portfolio companies, with the majority of Touchstone's investment going into businesses in which it is already a shareholder.

Since becoming a public company in 2006, Touchstone has raised more than £440.0 million of equity from investors, which has enabled it to invest in some of the most exciting spin-outs to come out of UK academic research. In addition, the Group has a £74.4 million term debt facility from the European Investment Bank (EIB).

Between Touchstone's admission to AIM (August 2006) and 31 July 2017, Touchstone has invested a total of £372.4 million across its portfolio companies, currently valued at £461.1 million and in addition has generated £51.0 million of cash realisations. In aggregate, Touchstone's portfolio, excluding Apollo Therapeutics and UCL Technology Fund, has collectively raised investment of more than £1.7 billion.

About Featurespace - www.featurespace.co.uk

Featurespace™ is the world-leader in Adaptive Behavioral Analytics and creator of the ARIC™ platform, a real-time machine learning software system developed out of the University of Cambridge.

The ARIC™ platform - a real-time, machine learning software system - monitors individual behaviors to catch new fraud attacks as they happen. At the same time, the increased accuracy of understanding customer behavior reduces the number of genuine customers whose purchases and transactions are incorrectly declined.

Featurespace is based in Cambridge, UK, and the Company has deployed ARIC™ to organizations that have services or products deployed in over 180 countries.