Ethics and compliance issues can bring down many high-flying companies. Just ask Zenefits or Lending Club. Convercent, an enterprise Software as a Service (SaaS) startup, promises to help companies avoid such lapses, and announced today that it has received a new investment of $10 million.
The Denver, Colorado-based startup provides software that helps companies become proactive rather than reactive to prevent future compliance incidents from happening. For example, employees can file reports anonymously via a hotline, email, mobile app, or online. There is also a standalone disclosure tool that allows companies to manage and update relationship disclosures to ensure transparent, compliant business practices.
“In today’s world, ethics and compliance have become a much larger part of the conversation,” said cofounder and CEO Patrick Quinlan, in an exclusive interview with VentureBeat. “If you look at the situation with Wells Fargo, United Airlines, and Volkswagen, all three of these were specifically ethics and compliance problems that caused radical changes in leadership, and in some instances like Volkswagen, billions of dollars in fines.”
The startup counts approximately 500 customers, which include Airbnb, LinkedIn, Petco, and Time Warner. There are generally two types of clients, said Quinlan — those that target a mature compliance program as a normal course of business, and those that make very rapid changes to their compliance. “Zenefits, for example, came to us in a hurry,” he said, explaining that the online HR company recently became a customer.
The startup is steering clear of the financial sector and its constantly shifting, regulatory scrutiny which, according to Quinlan, would consume too many resources. The company competes with NAVEX Global and MetricStream.
“We had tremendous growth in 2016,” said Quinlan. “We added more customers in Q4 of 2016 than we did in all of 2015.” The chief executive says this translates into a 70 percent growth rate, year over year.
Sapphire Ventures and Tola Capital Fund led this new round, splitting the shares equally. The proceeds will be injected into sales and marketing. Founded in 2012, Convercent currently has just under 100 employees and has raised a total of $47 million to date.