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Investing.com -- Riskified Ltd. (NYSE:RSKD) shares climbed 2% following reports that the company is considering a sale amid takeover interest. The fraud prevention software firm is said to be working with Qatalyst Partners to evaluate proposals from various parties, including digital payment processors and cybersecurity firms, according to Reuters, citing people familiar with the matter. Private equity firms and online shopping platforms are also among the potential buyers.
Although the conversations are in the preliminary phase and there is no certainty of a deal materializing, investors responded positively to the news. Riskified, which went public nearly four years ago, has seen its market value shrink to about $800 million after its shares plummeted more than 80% from a high in September 2021. The company has faced challenges in maintaining profitability, failing to produce a net profit since its IPO, according to data from LSEG Workspace.
In its latest earnings report released Wednesday, Riskified disclosed a wider net loss of $4.1 million for the quarter ending December 31, compared to a $3.3 million loss in the same quarter of the previous year. The increased loss was attributed in part to the departure of some large customers from sectors where the firm operates. Despite these setbacks, Riskified has established a client base that includes renowned names such as Prada (OTC:PRDSY), Booking (NASDAQ:BKNG).com, and Swarovski.
The company’s exploration of a sale comes at a time when many tech firms that went public during the industry’s boom around the last decade are struggling to compete with rivals and maintain profitability. Riskified’s decision to consider a sale reflects the broader trend of market consolidation and strategic acquisitions in the tech sector.
As the situation develops, market participants will be closely monitoring Riskified for any further announcements or confirmations regarding the potential sale and its implications for the company’s future.
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