When Spectrum Equity managing director Chris Mitchell flew into St. John’s to meet Verafin  two-and-a-half years ago, both parties noticed something in the other that they liked.

Mitchell and his team from the Boston and Menlo Park, Calif., private equity firm found a company with a remarkably open and innovative culture. And the execs from Verafin, which develops software that battles money laundering and fraud, learned that Spectrum understood their market like few other investors.

The relationship grew and culminated Thursday when Spectrum announced a $60-million investment in Verafin — probably the largest investment ever in an Atlantic Canadian startup. It is a deal that will finance the next phase of growth for Verafin and also has vast implications for the startup community in Newfoundland and Labrador and across the region.

 “Of all the private equity firms we spoke to, they knew the space more than anyone else,” said Verafin CEO Jamie King in an interview after the deal was announced.

King said his company has already benefited from its relationship with Spectrum because it has made introductions that have helped immeasurably.

Spectrum has invested in such financial services-related tech companies as InterbankFX, Mortgagebot and Ipay Technologies, and has been using its connections to aid Verafin. King said Verafin had identified eight private equity firms as possible funders and chose Spectrum after extensive internal deliberation.

The reason that Spectrum, which has raised $4.7 billion for investment in information technology and media companies and has more than 50 portfolio companies, took such an interest in Verafin is its clear success and its culture. Verafin has about 1,100 clients, mainly North American banks. Its revenues are increasing 50 per cent annually and will reach about $30 million this year.

But behind the numbers is a company with an intriguing wide open culture — surprisingly so, given that its products thwart organized crime. King and his co-founders believe they can succeed only if they create a culture where innovation thrives and employees’ creativity produces a constant stream of new products.

When the Spectrum team first visited St. John’s in late 2011, King made sure it met not only with the company’s senior managers but also the next level of managers. He says Spectrum saw what an open and vibrant company it was and was impressed.

People familiar with the deal said some of the funding will be used by Verafin for growth capital, while the rest is buying out early investors. King said the company, which has about 200 employees, will use the money to hire as many as 150 people in the next two to three years. They will mostly be sales people and software engineers in Newfoundland and Labrador.

 “We are committed to providing the most innovative products possible to our customers, and these are products you can let go and not constantly update.”

Verafin will continue to focus its business on American and Canadian lenders, but King said it could in time spread out into other financial industries, such as brokerages and insurance. He added that once again, Spectrum’s connections will help it push into these new markets.