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Digital security provider TeleSign plans market debut

By Carreen Maloney

22:17, 17 December 2021

Hand with lock image above
Digital identity verification and fraud prevention company TeleSign plans merger - Photo: Shutterstock

TeleSign, the digital identity verification and fraud prevention company used by eight of the ten largest digital enterprises in the world, is going public on Nasdaq in a SPAC merger expected to close in the second quarter of 2022.

The deal implies an enterprise value for TeleSign of $1.3bn (£98m) and will raise approximately $487m for TeleSign. That amount includes proceeds from the SPAC, North Atlantic Acquisition Corporation (NAAC), plus a $107.5 million private investment in public equity (PIPE).

Joe Burton, CEO of TeleSign, said the investment will help the company expand its reach around the world. It currently processes 21 billion transactions a year for customers in 60 countries.

TeleSign plans to use the funds “to further reinforce its position as a digital identity provider as well as build out its international organisation. Beyond that, TeleSign intends to target new customer segments, including mid-market and SMB (small- and mid-sized businesses), and develop new use cases to expand its identity offering.”

Presentation graphicInvestor presentation graphic - Photo: TeleSign

2,200 variables

“TeleSign empowers companies to transact, communicate and engage with their customers safely and securely. Building and maintaining continuous trust is our commitment to making the digital economy possible,” said Burton. “This transaction will allow us to increase our global trajectory and deliver our solutions where they are needed the most.”

Company revenues for 2021 are estimated to be $391m, TeleSign reported.

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The company offers a range of services designed to stamp out fraud and minimise risk to commercial enterprises. It creates application programming interfaces (APIs), that allow two applications to interact with each other.

Using its algorithms that rely on 2,200 variables, TeleSign delivers alerts, reminders and notifications to customers that can help merchants and marketplaces perform a multitude of functions. This can include minimising fake accounts and reviews, preventing account takeovers, conducting multi-factor authentication, verifying customer identities, reducing fraud and chargebacks, and assessing credit.

Founded by three USC biz-school grads

Telesign was founded in 2005 by three alumni of the University of Southern California’s Marshall School of Business.

In 2017, it was acquired by Brussels telecommunications company, Proximus Group (PROX), for $230m through its subsidiary, BICS. In February of this year, Proximus became the sole shareholder of BICS and TeleSign.

Proximus is not selling any of its shares in this SPAC transaction and will own 66.5% of the newly combined company after the transaction closes. The boards of directors of TeleSign, Proximus Group and North Atlantic Acquisition have all approved the merger.

Read more: Tech startup Rezolve gearing up to trade on Nasdaq

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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