With only eight months of existence under its belt, Virginia compliance tech company RegScale has had a pretty short life. But as of today, it’s hit a growth spurt with the close of a $20 million Series A.
SYN Ventures led the round, with additional participation from SineWave Ventures, Virginia Innovation Partnership Corporation (VIPC), SecureOctane and other strategic investors. The company, created in November 2021, is headquartered in Tysons Corner, with an R&D office in Knoxville, Tennessee.
RegScale helps companies keep up with regulatory requirements, paperwork and other compliance needs through an API-centric SaaS platform, offering both a free and paid model. According to CEO Anil Karmel, RegScale has seen triple-digit growth since its launch and nearly 8,000 downloads of the community edition of its software. The funding is intended to continue the progress it’s made over the past eight months and the “regulatory operations movement.” The company spun out of digital services firm C2 Labs.
The Series A follows a $1.5 million early funding round last fall, also from VIPC and New Dominion Angels, which landed the company an honorable mention slot on Technical.ly’s RealLIST Startups 2022 roundup. Karmel told Technical.ly the funds will be spent on sales and marketing, product development and at least a few dozen new employees in Tennessee and Virginia. It will also be concentrated on the company’s primary markets: government, financial institutions and the energy sector.
“Compliance has typically been this thing that you have to do, not this thing you want to do,” Karmel said. “By bringing an API-centric approach to compliance, making compliance real-time, making it continuous, making it complete, you can allow the great things in the community.”
Art Coviello Jr., the investment committee chairman at SYN Ventures and RegScale board member, said that the API element is what’s made the company so appealing and led to such strong growth in its short life. With companies constantly adding onto and building up their tech, Coviello said there’s not a day that goes by where new data isn’t being added and new software isn’t being built.
“That means you could be introducing new risks daily, companies and organizations are constantly innovating and that in and of itself will introduce new risks to new reasons for meeting a compliance requirement,” Coviello said.
And that means compliance needs are also constantly changing, which is where RegScale comes in. The software, Karmel said, helps companies constantly keep up with challenges and make sure they’re staying by the book.
“This is a pain felt by heavily regulated industries for decades and it has been largely addressed by people and paper,” the CEO said. “Our mission is to free organizations from paper by simplifying and automating regulatory compliance.”