Risk management is table stakes for enterprises of a certain size, yet only a few feel they’re adequately prepared to weather a true disaster. In a recent Deloitte survey, 20% of respondents said their organization wasn’t extremely or very effective at managing traditional risk types, such as liquidity, underwriting, credit, asset and liability, investment, and market, with even fewer expressing confidence in their ability to manage newer risk types, like data integrity and third-party risk.
That’s where LogicGate comes in — or so goes the pitch by founders Dan Campbell, former Accenture analyst Jon Siegler, and Matt Kunkel. They cofounded the Chicago, Illinois-based startup in 2015 with the goal of developing a platform that would allow businesses to automate and track processes and compliance. After graduating from Techstars’ accelerator program, LogicGate nabbed nearly $2 million in seed funding, followed by $7.5 million in a series A round. This morning, it announced the close of an even larger round intended to provide months of runway.
LogicGate says it has secured $24.75 million in new funding — a combination of equity and venture debt — in a round co-led by Jump Capital and High Alpha Capital, with participation from Greenspring Associates and Silicon Valley Bank. CEO Kunkel told VentureBeat that the funds will be “aggressively” invested in initiatives that might help solve risk management challenges “more holistically,” specifically on the content, frameworks, data partnerships, and integrations side of the business, and in hiring. (LogicGate plans to add 170 jobs by 2021.)
The startup’s cloud-hosted, no-code platform optimizes governance, risk, and compliance (GRC) processes with customizable apps and features, including a drag-and-drop interface that lets managers define logic and set rules to automate workflows. It ships with a library of configurable apps built specifically for risk management controls and an on-the-fly publishing tool for designing reports that can be pulled into centralized data repositories. Furthermore, LogicGate supports collaboration with tools that enable the sharing, assigning, discussing, and monitoring of ongoing jobs with internal and external employees, and it provides a definable roles system that prevents groups or individuals from taking actions on items they shouldn’t.
By some estimates, the global (GRC) software market is anticipated to be worth $49.9 billion by 2024, up from $23.1 million in 2016. Countless startups are vying for a slice of the growing pie, including RiskLens, a cyber risk qualification and management software provider that nabbed $20.55 million last April. Georgia-based cybersecurity and compliance startup DefenseStorm secured $15 million in July, while San Jose, California-based Securiti.ai emerged from stealth with $31 million in August.
But LogicGate found success early on, managing to acquire customers like SoFi, Paxos, Capco, 7.ai, and Nucleus. “GRC has been stuck in the back office for too long. The next stage of GRC technology demands a flexible approach, where organizations can see real business value and impact across all departments,” said Jump capital managing partner and cofounder Michael McMahon. “That’s why at Jump, we’re doubling down with our investment in LogicGate. As a forward-thinking, agile GRC platform, the potential for its veteran leadership and innovative engineering teams is exponential.”