Why Billionaire and Former Glencore Boss Gary Fegel Is Investing $15M In A Biometric Security Firm

Gary Fegel knows his strengths and his limitations -- and staying honest to both is his strategy for making money in life after Glencore, the commodities giant that made him a billionaire before he left two years ago.

As an aluminum trader -- and the boss of his department before leaving -- his world revolved around profit and loss. Determining and analyzing company valuations, an essential aspect of venture capital, isn't his specialty -- and he isn't interested in discovering the next Snapchat or WhatsApp.

"Where I come from, you make money or you lose money. There’s nothing in between," says Fegel, 41, whose Zurich-based GMF Capital has so far stuck mostly to real estate deals and some private equity. "Start-ups are a little bit of a gamble. I don’t really believe in valuations, I believe in cash flows."

So why is Fegel, who's worth $1.2 billion, investing $15 million in FST Biometrics, a small Israeli tech firm that specializes in analysis of human features and behavior to enhance security?

For starters, Fegel objects to the "start-up" label some have cast on the company. FST Biometrics -- formerly FST21 before a rebranding last year -- was founded more than seven years ago by Aharon Zeevi Farkash, a former-general with 40 years of security and intelligence experience with the Israeli Defense Forces.

"It’s not your typical start up situation. They’re very serious people who’ve been around for a long time. They have an amazing track record," Fegel told Forbes.

More importantly, the company already has a product and is making money.

According to Fegel, FST has 140 customers -- most of the demand thus far is from governments, though  Visa and Facebook have bought in too -- and can't keep up with demand for its services, which employ algorithms to recognize faces and human movement from a distance, enabling secure access to sensitive areas without having to swipe a card or even come to a stop. He says FST is currently performing one million identifications per month with an accuracy rate of 99.97 percent.

"They don’t need money to develop a product, they need money to roll it out on a global scale," says Fegel.

The company wouldn't disclose revenues or profits, nor what FST was valued at for its latest funding round.

While uses for government buildings, corporate offices, airports and financial institutions are obvious, FST also envisions its products being installed in individual residences. And Fegel says improvements in smartphone cameras mean FST's services could have mobile applications in the future as well.

It's not without risk and speculation, of course, but with his latest investment Fegel feels he's tacking closer to his commodities-trading skill set than a flirtation with assessing the prospects of the next Silicon Valley brainchild.