Revenue Management Solutions (RMS), a healthcare payment automation service provider based in Oklahoma City, has bought Israeli company OrboGraph, which provides advanced check recognition and fraud detection solutions and automated healthcare payment processing. The $100 million plus acquisition was financed through the first follow-on fund of St. Louis-based private equity firm Thompson Street Capital Partners (TSCP), which owns RMS.
OrboGraph, which is located in Rehovot and in Massachusetts, claims to be a world leader in AI-based check recognition. Its systems read documents in a variety of languages, including English and Hebrew. The company formed the OrbNet AI Innovation lab in Israel, focusing on automating check payments and detecting fraud in the US, Israel, and other countries. It has also developed the Healthcare Payments Innovation Center (HPAC), a service for extracting financial content from printed documents in the US Healthcare Payments market. The company says that it has processed more than 100 billion checks, and saves its clients about $200 million in annual losses.
OrboGraph was founded in 1995 by Avikam Baltsan, a veteran of the Operations Research Branch of the Israel Air Force and a graduate of the Technion and of Tel Aviv University, as a spin-off from Orbotech, which was sold to US company KLA in 2019. Orbotech, a developer of automated optical inspection solutions for circuit boards and flat panel displays, supported OrboGraph in its early years, providing infrastructure and its image processing know-how. In 2007, Barry Cohen, then president of Orbotech USA, joined the company as CEO.
"OrboGraph was able to identify and leverage during its development two dramatic changes that took place in the world, the globalization revolution and the AI revolution. At the beginning of the millennium, before artificial intelligence technology matured, we implemented a creative, patented solution of working in the cloud to complete the text fragments that we did not automatically read. The system we built optimally combined automatic reading with remote typing from anywhere in the world and offered our customers a 100% real-time solution," Baltsan said. "Over the past decade, we have been at the forefront of advanced AI technologies, and in collaboration with Israeli academia, we have developed groundbreaking solutions and upgraded all of our systems to deep learning-based systems, including the ability to translate huge amounts of data into consistent and ongoing performance improvements and new services that we will continue to offer in the future."
OrboGraph’s activities in the healthcare payments sector will be transferred to RMS, while the banking operations will remain under the authority of OrboGraph, including the brand name. OrboGraph has more than 4,000 clients, mainly recognized financial institutions in the US, service bureaus and clearing houses, as well as most of the major banks in Israel.
"The financial market today suffers from massive fraud losses, a number which is expected to rise even further as the economic recession, in the US and globally takes hold. As a result, the market for automated fraud detection and check reading solutions is only expected to grow and become stronger," said Brian Kornman, Managing Director at TSCP. "OrboGraph is the first Israeli company we have acquired, but for several years now, we have been curiously following the Israeli high-tech market with the aim of making additional acquisitions in the future."
Published by Globes, Israel business news - en.globes.co.il - on December 28, 2022.
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