Quavo secures $300M growth investment from Spectrum Equity
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Quavo is the category leader in end-to-end dispute management software, solving a mission-critical challenge for banks, credit unions and fintechs by streamlining every step of the consumer transaction dispute process. Quavo's solutions enable financial institutions to deliver faster, more transparent, and more reliable dispute resolutions for account holders - helping build trust, strengthen loyalty, and modernize the way institutions engage with their account holders. QFD, the company's flagship solution, automates the intake, investigation, chargeback, recovery, and client communications workflows across all payment methods and dispute types while ensuring regulatory compliance and enhancing the account holder experience.
With Quavo, clients automate ~80% of the tasks and interactions involved in resolving a typical consumer dispute and recapture ~85% of potentially lost disputed funds. These gains are achieved through Quavo's workflow automations, its sophisticated decisioning engine, and a comprehensive library of 3rd party API integrations.
Clients unlock efficiencies while improving outcomes: the average client sees a 37% reduction in write-offs and reduces days to issuing consumer credit from 11 to less than one.
For clients who prefer not to manage disputes in-house or rely on a third-party outsourcer, Quavo offers Dispute Resolution Experts (DRE), a fully managed service offering that combines QFD technology with active management delivered by Quavo's team of specialists.
Founders Joseph McLean, David Chmielewski, Daniel Penne, and Richard Jefferson launched Quavo in 2016 based on their learnings from building the dispute management systems in-house at Bank of America. Since the launch of its SaaS platform, Quavo has seen rapid market adoption, growing revenues 60% annually since 2022. Today the Company automates over 12.5 million consumer disputes annually on behalf of a broad spectrum of financial institutions, from large global issuers and fintechs to regional banks and credit unions, delivering consistent performance across all institution types.
Quavo is committed to ongoing product innovation, pioneering the application of artificial intelligence to improve dispute-resolution outcomes through its proprietary decisioning engine. Leveraging its cross-institution transaction data paired with third-party data integrations, Quavo is continually improving its decisioning engine and workflows to drive increased automation and better outcomes for its financial institution clients and their account holders.
'We are thrilled to be partnering with Spectrum Equity on the next chapter of growth at Quavo,' said Joseph McLean, Co-Founder and CEO of Quavo. 'With this new investment, we intend to accelerate our AI-led product development initiatives and expand our go-to market and client success teams to meet growing market demand and drive exceptional client outcomes. Our vision to restore financial trust and simplify fraud and disputes is unwavering, and this partnership allows us to achieve these goals faster and at even greater scale.'
'Fraud and dispute management is a massive business-as-usual problem for financial institutions and fintechs alike, and we believe that Quavo is uniquely positioned to drive automation benefits and better outcomes in this space,' said Adam Margolin, Managing Director at Spectrum Equity. 'Quavo's highly configurable platform, scaled transaction data powering its decisioning engine, and mission-driven approach to solving costly and time-consuming problems for its clients set the company apart. We couldn't be more excited by the opportunity to back Joe and the rest of the Quavo team going forward.'
Existing investor FINTOP Capital will sell their ownership stake in the transaction; the company thanks them for their many contributions to Quavo's accomplishments to date. Quavo's co-founders and Pegasystems, which has been a strategic investor and technology partner to Quavo since the company's founding, will all remain significant shareholders following the transaction. Additional terms of the transaction have not been disclosed.
KeyBanc Capital Markets served as exclusive financial advisor and Goodwin Proctor served as legal advisor to Quavo. Latham & Watkins served as legal advisor to Spectrum Equity.
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