VC-backed IDNow acquires Wirecard Communication Services

The acquisition of Wirecard CS was structured as an asset deal and was made via a structured auction process, according to a statement, which also said that IDNow and Wirecard CS had previously worked together.

The strategic rationale behind the acquisition is to enhance the service quality that IDNow offers its customers. According to the same statement, demand for its digital ID verification services has increased during the coronavirus pandemic and the company aims to improve its response times to customers.

Nils Freudenberg of Tiefenbacher Insolvency Administration acted as Wirecard CS's insolvency administrator. Its parent company, DAX-listed fintech Wirecard, filed for administration in June 2020 with the Munich district court, citing "impending insolvency and over-indebtedness" in a company statement.

Wirecard CEO Markus Braun resigned and was subsequently arrested in relation to alleged market manipulation and false accounting. According to press reports, the company's accounts revealed a €1.9bn hole, which auditor EY was unable to locate.

BayBG first invested in IDNow in July 2015. In September 2016, BayBG, Seventure Partners and several business angels backed a funding round for IDNow.

Giesecke + Devrient Ventures invested in IDNow in May 2018, acquiring a minority stake in the company.

Corsair Capital joined the company's investor base in October 2019, leading a $40m financing round for IDNow with participation from its existing backers. The GP invested via Corsair V Financial Services Capital, which held a final close in February 2020 on $1bn. The vehicle generally invests in companies with enterprise values of $100-500m, making investments of $50-100m.

Company
Wirecard CS was previously the customer services division of payments processor Wirecard, offering both call centre and digital services. Founded in 2003 and based in Leipzig, it has 150 employees, while parent company Wirecard employed 6,000 people in total.

People
IDNow – Andreas Bodczek (CEO).
Wirecard Communication Services – Amra Blume (managing director).
Seventure Partners – Ludovic Denis (partner).
BayBG – Andreas Heubl (senior investment manager).
Giesecke + Devrient Ventures – Michael Hochholzer (managing director).
Corsair Capital – Raja Hadji-Touma (partner); Edward Wertheim (principal).

Advisers
Company – Tiefenbacher Insolvency Administration, Nils Freudenberg (legal).
Acquirer – Schnittker Möllmann Partners, Benjamin Ullrich, Matthias Kresser, Malte Bergmann, Matthias Enge, Ann-Kristin Lochmann (legal); PWWL, Thomas Wahlig, Eva Trost (legal).

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• Topics
• Portfolio management
• DACH
• Industrials
• Build-up
• Germany
• Seventure (SPEF)
• Bayerische Beteiligungsgesellschaft mbH (BayBG)