ETHIX360, a Charlotte-based startup specializing in compliance-as-a-service technology, recently closed on $3 million in a Series A round led by D.C.-area investors.
Early Light Ventures led the round, and it included participation from Vienna, Virginia-based Blu Ventures, as well as members of the Baltimore Angels.
Along with local investors, the five-year-old company has business reach and roots in the region. Its cofounders, J Rollins and Bob Latchford, are also longtime local startup leaders, having both held C-level positions at returns technology company Optoro. Its headquarters moved to Charlotte in 2017 through an acquisition.
The company has a suite of solutions, including CaseTrac, in areas including employee ethics communication, case management, compliance training and policy management.
Rollins said the platform is designed to give “voice to the voiceless” employees who want to come forward and report sensitive issues like fraud or financial malfeasance. For whistleblowers, it’s important to ensure that anonymity is protected, and that it’s a process that is respectful and empathetic of the people coming forward. And for the company, there’s incentive to get it right.
“You want accurate information,” Rollins said. “You want complete information because you’re going to have to investigate this, and you want to make sure the person is honest and comfortable when they say it.”
The company shared the product’s reach with these metrics: Over 5 million workers, on six continents, in 80-plus countries, speaking 67 languages. It grew 35% in 2020.
The round was more than a year in the making. A prominent VC firm had agreed to lead the round. But the closing ended up being the day before most of the world was put on lockdown as the coronavirus spread. In the uncertainty, the firm backed out, saying it would be putting all capital toward existing portfolio companies. The investment was set to fund growth in development, sales and marketing. Now, that money wouldn’t be coming.
However, additional investors soon came together to fund a convertible note that helped the company keep growing. The message, said Rollins: “Let’s not stop progress. Let’s not wait.” A year later, March came around again. This time, investors put in equity to close the round. And it’s led by Early Light, which was an investor in previous rounds.
“We are very excited to lead ETHIX360’s round — the team and the opportunity exemplify everything we look for at Early Light Ventures,” said Scott Garber, Early Light Ventures’ managing partner, in a statement. “CaseTrac is a ‘need-to-have’ product with a growing market need and though the team has plenty of experience, they also have the tenacity and drive of an underdog. PolicyTrac also promises to really rev up their growth in 2021, and adds another essential tool for their large, existing client base.”-30-