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Fraud Prevention Software Firm Riskified Explores Sale

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Riskified, a New York-based company specializing in fraud prevention software for e-commerce, is exploring strategic options, including a potential sale, after attracting interest from multiple parties, according to sources familiar with the matter. The company, originally founded in Israel, is working with investment bank Qatalyst Partners to evaluate takeover approaches, with discussions remaining in the early stages.

Potential buyers for Riskified include digital payment processing firms, online shopping platforms, cybersecurity companies, and private equity firms. However, the sources cautioned that a deal is not assured. Following the news, Riskified’s stock price rebounded, surging nearly 9% on Wednesday.

Riskified, which went public nearly four years ago through an initial public offering, is currently valued at around $860 million. The company has faced significant challenges, with its stock plummeting more than 80% from its peak in September 2021 to its close on Tuesday. Despite its success in providing fraud prevention software for retailers, Riskified has not been profitable since its shares began trading.

For the quarter ending December 31, the company reported a widened net loss of $4.1 million, compared to a loss of $3.3 million in the previous year. This financial setback was partially attributed to the loss of several large customers in some of its key sectors.

Founded in 2013, Riskified provides fraud prevention services to e-commerce businesses, helping retailers protect digital transactions from fraudsters. Notable clients include luxury fashion brand Prada, online travel platform Booking.com, and jewelry brand Swarovski.

Applied Digital Posts Smaller-than-Expected Loss on Increased Demand for Cloud Services

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Applied Digital, a data center operator, reported a smaller-than-anticipated loss for the second quarter, driven by heightened demand for its high-performance data center infrastructure and cloud services. The company’s stock surged nearly 10% following the announcement of a significant investment deal with Australia’s Macquarie Group.

Macquarie has agreed to invest up to $5 billion in Applied Digital’s AI data centers, acquiring a 15% stake in the company’s high-performance computing business. This funding is expected to help Applied Digital reduce its debt from constructing data centers in North Dakota and recover more than $300 million of its equity investment in these facilities.

For the quarter ending November 30, Applied Digital reported an adjusted net loss of 6 cents per share, a smaller loss than the 15 cents per share analysts had predicted. The company’s revenue for the quarter was $63.9 million, a 51% year-over-year increase, aligning with analyst expectations.

Applied Digital’s success is closely linked to the growing AI industry, with the company’s data centers serving high-performance computing needs for technologies such as AI and crypto mining. The cloud services segment has also contributed significantly to the company’s growth. As the demand for data center capacity continues to rise, Applied Digital’s ability to secure substantial investments will be crucial in meeting these long-term capital requirements.

The company’s stock has more than tripled over the past two years, as investors look to capitalize on the booming AI sector, positioning companies like Applied Digital to benefit from the growing demand for advanced computing infrastructure.