Kount sold to Equifax for $640 million

In the first big Idaho startup acquisition of the year, Kount Inc. has been bought by Equifax for $640 million.

The Boise-based company develops fraud prevention software. Kount and its employees will be part of the largest Equifax business unit, United States Information Solutions, the company said.  The acquisition is intended to expand the Equifax global footprint in digital identity and fraud solutions, helping businesses to better engage with their customers online while combating fraud.

All of Kount’s employees, including CEO Brad Wiskirchen, are expected to stay on in the company’s Boise office, to which it moved in 2019. Wiskirchen will assume the role of senior vice president and general manager, reporting to Sid Singh, president of United States Information Solutions at Equifax.

“Kount is one of the most amazing companies in Idaho,” said Jay Larsen, president and CEO of the Idaho Technology Council, in an email message. “Several companies have been interested in acquiring Kount as they are a unique company with extraordinary fraud detection and prevention services and products. Kount has been a major contributor towards growing organic talent and we are fortunate to have Brad Wiskirchen and team continue to grow Kount out of Boise. There will be a lot of synergies because of the Equifax acquisition of Kount.”

The company received a venture capital infusion of $80 million in 2015 from CVC Capital Partners, in what was considered at the time the largest private equity investment in Idaho. At that point, Wiskirchen – who at the time was CEO of three different, though related, companies – became CEO of just one, Kount.

Typically, when companies are given venture capital, the investors would like to get their money back at some point, which generally means either an acquisition or an initial public offering. Kount has been suggested as a potential acquisition target since at least 2017, when Intuit purchased TSheets for $340 million.

Kount’s acquisition didn’t set records; Cradlepoint was sold last September to Ericsson for $1.1 billion. Previously, the biggest exit had been in April 2019, when ICONIQ Capital made a majority investment in Truckstop.com. While that price was not revealed, industry estimates pegged it at $1 billion.

Big tech exits like this are important because they not only bring attention to the Idaho entrepreneurial community, but because employees that receive a share of the money can end up using the money by making further investments in Idaho’s startup community themselves, either by starting their own companies or by investing in other companies as angel investors.

Equifax indicated that part of its interest in Kount is in the company’s portfolio of patents, which include using artificial intelligence to help determine whether a transaction is fraudulent.

The transaction is expected to close in the first quarter.

“IDC Financial Insights believes that the digital identity market will have substantial growth over the next three years as many banks and merchants seek to transform their digital offerings and digital customer experiences,” wrote Steven D’Alfonso, a research director with IDC Financial Insights responsible for compliance, fraud, and risk analytics strategies, in May in a paper sponsored by Kount. “Organizations in the digital commerce space will require technology providers that can help them establish trust in the digital identities that engage them. Kount is well positioned to help digital commerce organizations meet digital identity trust requirements through its real-time Identity Trust Global Network and its adaptive, AI-driven fraud solutions.”