Quavo Secures $300M Growth Investment from Spectrum Equity

Quavo Spectrum Equity Investment has secured $300 million to scale Quavo’s cloud-based fraud and dispute automation platform. This round of funding will accelerate product innovation, expand AI capabilities, and make it easier for banks, credit unions, and fintechs to deliver value with Quavo’s end-to-end SaaS dispute management solutions.

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. 

With the Quavo Spectrum Equity Investment, the company is in a good position to grow its AI-powered dispute resolution tools and offer next-generation fintech support to clients around the world.