MBA students at Wharton & TAU researched the chance of acquiring Facetrom
Some words from the research:
Facetrom boasts the first personalization tool that is based on a user's objective data: their face. Facetrom is not a facial recognition technology, but rather a facial and biologic analysis technology. This technology and underlying profile development algorithm are, according to the founder, the first such technology in the market that is able to take a single facial photo and build personalized profiles for use in dynamic scoring circumstances
Assessing Multinational Acquirers
Facetrom’s technology solves for a variety of challenges across numerous verticals and has enormous growth potential. But, like many successful Israeli startups, the prospects of acquisition will be strong as the technology continues to prove results. As such, many firms within and working across these verticals will likely be interested in acquiring Facetrom’s technology
Facetrom is truly a company with few comparables. The face detection technology has numerous applications across multiple verticals, which we have not found in other companies within the space. The bulk of the push in the industry is in HLS technology, incorporating biometrics and centered around security applications (airports, transit centers, government buildings, etc) for facial recognition. Comps for Facetrom better fall within the fintech and insurance industries to measure and mitigate risk.
Current spend from insurance companies globally to combat fraud is ~$300Bn, with direct loss totaling nearly $200Bn. Additionally, nearly 99 percent of insurance fraud activity is undetected. In conjunction with this massive spend to mitigate losses from fraud, the total addressable market within the space is also measurable, and is significant. 40 percent of millennials do not have credit history and are not able to get loans, but with the risk mitigation assistance offered by Facetrom, this market could become loan customers of banks worldwide. On the same global scale, and outside just the millennial generation, ~2Bn people do not have sufficient credit history to receive a loan or a mortgage.
If these organizations had the ability to reduce loss and fraud, even if only by a reasonable degree of certainty, the cost savings to the company would be a significant return on their investment into Facetrom technology.
In conclusion, Facetrom’s technology has the potential to revolutionize several industries. Their potential presents several viable future growth options - whether as an independent entity, part of a strategic joint venture, or as a key technology component of a larger multinational organization like. While an acquisition is likely path for Facetrom we would encourage the founders to remain independent and further develop their technology so that its benefits can be reaped by more than one industry."