Eliminating disruption in the workplace is the mission that has earned London-based Vault Platform support from AI-focused fund Gradient Ventures, which is the lead investor in the $8.2 million Series A round announced today.
Illuminate Financial also joined the round, as well as existing investors including Kindred Capital and Angular Ventures. The $4.2 million seed round closed back in 2019.
Vault sells a suite of SaaS tools for corporate or large/large companies to support them in proactively managing internal ethics and integrity issues. In addition to tools that allow employees to report issues, the platform includes built-in data and analytics to support broader customer audit and compliance requirements.
In an interview with TechCrunch, co-founder and CEO Neta Meidav said that in addition to fully supporting the overall mission of modernizing older reporting tools such as hotlines provided to employees to identify risks related to workplace behavior (whether harassment and harassment, racism and sexism, bribery, corruption and fraud), as would be expected, Gradient Ventures was interested in the potential to use artificial intelligence to further improve the SaaS tool report.
A feature of the current platform, called “GoTogether,” is an escrow system that allows users to file reports of wrongdoing with the appropriate internal agencies, but only if they are not the first or only person to file a report about the same person. The idea is that this can help encourage employees (or outsiders, if open reporting is allowed) to report problems that they may not choose to for various reasons.
Now Vault wants to extend this feature so it can be used to proactively identify problem behaviors that may not just apply to a specific individual, but may affect an entire team or department — using natural language processing to identify patterns and potential connections in the type of activity being reported.
“Today, our algorithms determine the identity of the alleged perpetrator. However, many of the events that people may report are not related to a specific person-they may be more descriptive,” Meidav explains. “For example, if you come across some irregularities in your department’s accounting department and suspect corruption or fraud is occurring.”
“If you think about the biggest disasters and crises [with workplace misconduct] that have happened in recent years-the dieselgate story at Volkswagen, what happened at Boeing-the common denominator in all these cases is that there was some serious ethics violation or disruption that was seen by several people in the organization in distant parts of the organization. And the dots weren’t connected,” she continues. “So the capacity that we’re building and building now – building on what we already have at GoTogether – is the ability to connect to these recurring events and be able to connect and understand and read the human input. And connect the dots when recurring events happen — alerting company boards that there’s a particular hot pocket that they need to investigate.”
“This will keep companies from taking a lot of risk, a lot of expense, and, in fact, prevent a huge loss. Not only financially, but also reputationally, sometimes even humanly… That’s what we’re going for and what we want to achieve.”
The question arises as to how secure Vault’s GoTogether feature is – how easily it can be copied – given that the idea cannot be patented. So adding artificial intelligence may be a way to add complexity to try to maintain a competitive advantage.
There’s very complex, unique technology in the backend, so we continue to invest in that part of our technology.” And Gradient’s investment and the specific funds that we’re now getting from Google will only strengthen that element and that side of our business,” Meidav says when we ask about protection.
Commenting on the funding in a statement, Gradient Ventures founder and managing partner Anne Patterson added: “Vault is tackling an important area by offering an innovative and timely solution. Vault’s app provides organizations with a data-driven approach to addressing issues such as professional fraud, bribery or corruption cases, safety violations and misconduct. Given their impressive team, technology and customer engagement, they are poised to improve the modern workplace.”
The London-based startup was only founded in 2018 – and while it is most eager to disrupt legacy hotline systems that offer only a linear and passive channel to report misconduct, there are a number of other startups playing in the same space. Examples include AllVoices of Los Angeles, Whispli of YC, Hootsworth and Spot.
In all likelihood, the competition will continue to grow as regulatory requirements for workplace reporting continue to increase.
The upcoming EU Whistleblower Protection Directive is one regulation that Bolt believes will increase demand for smarter compliance solutions – called “TrustTech,” as she seeks to label them – because the directive will require companies with more than 250 employees to have a reporting solution by the end of December 2021, prompting European companies to seek tools to help them reduce their risk of misconduct.
She also believes that a platform solution can help bridge the gap between the various internal teams that may be involved in handling complaints, as well as speed up internal investigations by offering the ability to communicate anonymously with the original complainant.
Meidav also highlights U.S. regulators’ growing focus on workplace whistleblowing, noting some recent large payments by the SEC to outside whistleblowers, such as the $28 million paid to one whistleblower earlier this year (in connection with the Panasonic Avionics consultant corruption case).
She also argues that the growing number of companies going public (e.g., through SPAC, where there was less regulatory scrutiny before the “blank” IPO) is increasing reporting requirements in general – meaning that, again, more companies will have to have a third-party managed system that allows for anonymous and non-anonymous reporting. (And, in general, we can only speculate whether companies going public via SPAC may have more need for non-fraudulent reporting services compared to companies choosing the more traditional and thoroughly vetted route to market…)
“Just a few years ago, I had to convince investors that this category was indeed a category – and now it’s 2021, congratulations! We have a market. It’s a growing category, and there’s competition in this space,” Meidav says.
“What really sets Vault apart is that we didn’t just focus on digitizing an old legacy process. We focused on using technology to really empower employees to do more in-house misconduct and speak up in ways that weren’t available to them before.” GoTogether is really unique, as is what we do at the operational level for the company – collaboration, for example.”
She cites an example of how an oil and gas customer set up the platform to use the anonymous chat feature in the Vault app to provide employees with a secure direct line to company management.
“They used anonymous chat, which the app allows people to have a direct line to management,” she says. “It’s incredible. It’s such a progressive and forward-thinking way to use this tool.”
Meidav says Vault has about 30 customers at this stage, split between the U.S. and the EU, the main regions it’s targeting.
And while its platform is focused on enterprises, its early customer base includes a fair number of large companies – familiar names like Lemonade, Airbnb, Kavak, G2 and OVO Energy are on the list.
Large companies may be natural customers for these types of products, given the tremendous pressure that can be placed on a company’s culture when a startup moves to rapidly increase its headcount, says Meidav.
“They’re early adopters, and they’re also very sensitive to events like these kinds of scandals [in the workplace] because it can have a big impact on them … and also the fact that when a company goes through a period of hypergrowth – and typically hypergrowth is more common in tech companies than in any other sector – hypergrowth is a time when it’s very important for you, as management, as leadership, to protect your culture,” she suggests.
“Because it changes very, very quickly, and those changes can lead to all sorts of things – and it’s very important for management to be on top of it. So when a company is experiencing rapid growth, it’s a great time to implement a tool like Vault.” So is the fact that any company that is even thinking about going public in the coming months or years will be very happy to implement a tool like Vault.”
An expansion of Vault’s own team is also planned after Series A closes, as the company prepares for the next phase of growth of its own business. Presumably, however, it has no shortage of a breach reporting solution.