A Denver tech firm that helps much larger companies stay in compliance with regulators and company ethics will announce Tuesday that it raised $11 million in its quest for profitability.
Convercent, created in 2012 with the union of compliance hotline firm Business Controls and Nebbiolo Ventures, said the latest Series C round was led by Tola Capital and includes existing investor Sapphire Ventures and others.
“This is enough cash for us to get to cash-flow break-even,” said Patrick Quinlan, Convercent’s CEO. “What we’re focused on right now is building sustainable growth that gives us the freedom of being a cash-flow-positive company. We will have many options from there.”
The cloud-based software counts The Kraft Heinz Company, Under Armour, Airbnb, Petco and LinkedIn as customers. A recent customer includes health-insurance brokerage Zenefits, which saw its CEO resign in February after “inadequate compliance procedures and internal controls,” according to The Wall Street Journal.
Compliance is more than sharing a lengthy document with an employee en route to a complicated international real estate deal, Quinlan said. It’s also about communicating with employees and making sure they understand the rules before a deal is made or policy is broken. That’s the sort of tools Convercent offers.
“Our software can see when you just bought a plane ticket to China and say, ‘Let’s make sure you’ve done all you need. Don’t forget about XYZ,’ ” Quinlan said. “To have an effective compliance program, you need to continuously market the company’s ethics and values to employees before they get on that plane to China. That’s much more effective than hitting them with a 300-page policy.”
With the new funding, Convercent plans to hire about a dozen employees this year and needs “at least 10 immediate hires on our software engineering team,” according to Chris Nixon, the company’s executive vice president of marketing.
The company, at 929 Broadway, employs 67 people.
Tola’s chief operating officer, Stacey Giard, joins Convercent’s board. Steve Foster, who founded Business Controls and is a former chairman of the Colorado Technology Association, is also on the board.
The company was honored by the city of Denver in 2013 as one of its fast-growing companies, or gazelles. Excluding the latest round, Convercent has raised about $30 million from investors.