AI Compliance Startup Raises $32M
Karun Kaushik and Selin Kocalar recently took the startup world by surprise by raising a remarkable $32 million in Series A funding for their company, Delve, which specializes in automating regulatory compliance using AI technology. Initially, they weren’t planning to pursue funding at this stage; however, a surge of inbound investor interest prompted them to act. Their venture, which had already secured a $3 million seed round in January, is now valued at $300 million.
Led by Insight Partners, the funding round attracted contributions from several Chief Information Security Officers (CISOs) from Fortune 500 companies. According to Kocalar, Insight has provided exceptional support and was deemed the ideal long-term partner as Delve continues to scale. Notably, this funding round represents a significant increase in valuation—about a tenfold rise from their previous funding efforts.
In terms of user base, Delve has expanded its clientele rapidly, growing from 100 companies in January to over 500 by July. Many of these clients are burgeoning AI startups, including notable names like Lovable, Bland, and Wispr Flow. This swift growth highlights the increased demand for efficient compliance solutions in the AI space.
The journey for Kaushik and Kocalar began at MIT, where they met during their freshman year. Both were passionate about AI and health technology, with Kaushik notably having scaled a COVID diagnostic system to thousands during the pandemic. Their initial focus on developing an AI-powered medical scribe led them to the complexities of HIPAA compliance, prompting them to pivot. This shift towards building compliance solutions not only fueled their entry into Y Combinator but also helped secure the seed funding from investors like General Catalyst.
As their understanding of the market deepened, they quickly recognized the broader potential of compliance documentation across various frameworks, including SOC 2, PCI, and GDPR. This broadening of focus reflected how compliance, pivotal in product launches and enterprise dealings, can often hinder business growth when handled manually. Kaushik articulated the challenge, stating, “Compliance frameworks are standardized. Businesses aren’t,” highlighting the friction often felt between rigid compliance requirements and the dynamic nature of businesses.
Delve is addressing these challenges with AI-driven agents that work seamlessly in the background, integrating with customers’ existing tools and automating processes that traditionally consume considerable resources. Kocalar envisions this compliance effort as just the beginning, asserting that Delve intends to automate significant back-office operations, ultimately seeking to save a billion hours of repetitive work across sectors including cybersecurity and internal governance.
The interest from Insight Partners is a testament to Delve’s promising roadmap. Praveen Akkiraju from Insight highlighted the integral role compliance plays in organizational operations, asserting that modernizing compliance functions could transform businesses entirely. However, Delve is not without competition. The market is seeing the emergence of other AI companies developing agents for similar automations, alongside larger labs like OpenAI introducing advanced technologies.
Kocalar views the rising competition as validation rather than a threat, pointing to Delve’s specialized expertise. She emphasized the importance of the domain-specific knowledge that Delve is incorporating into its technology. As regulations evolve and new compliance standards emerge, this niche understanding is what she believes will distinguish Delve in a crowded marketplace.