Diversio Secures Funding for DEI Diagnostics

The Challenge of Implementing Diversity and Inclusion Initiatives

While a commitment to diversity and inclusion in the workplace is increasingly common, effectively translating that commitment into tangible results often proves difficult.

Diversio addresses this challenge by leveraging artificial intelligence, data analytics, and expert insights to pinpoint breakdowns in a company’s processes.

The company then develops a comprehensive action plan to facilitate positive change and improve outcomes.

Securing Series A Funding for DEI Solutions

Diversio recently announced the successful completion of a $6.5 million Series A funding round.

Investors participating in this round included First Round Capital, Golden Ventures, and Chandaria Family Holdings.

The Genesis of Diversio

Laura McGee, co-founder and CEO, established the company in 2018 following extensive diversity and inclusion consulting work with both corporate entities and governmental organizations.

Her experiences, including numerous CEO roundtables, revealed a consistent theme: organizations understood the importance of diversity but lacked a clear pathway for implementation.

“Companies expressed a need for measurable metrics and accountability to effectively set goals and drive meaningful change,” McGee explained to TechCrunch.

“We view this as a software-based solution, one that companies should utilize continuously, integrate with their existing records, and ultimately rely on for evidence-based recommendations.”

How Diversio’s Software Works

Diversio’s platform ingests employee survey data and employs natural language processing algorithms to analyze the responses.

This analysis identifies specific obstacles hindering the success of diverse employees.

The company then correlates these identified pain points with action items drawn from a database of 1,600 validated programs and policies sourced globally.

From Bootstrapping to Institutional Funding

This Series A funding represents Diversio’s first institutional investment, following an initial $60,000 raised from angel investors and a period of self-funding.

Securing funding proved challenging initially, as investors questioned the willingness of companies to invest in this area.

However, the landscape shifted dramatically in 2020, particularly in the wake of George Floyd’s death, with diversity and inclusion gaining recognition as a critical business imperative.

The Evolving Importance of DEI

“Customers now expect companies to demonstrate proactive measures, and investors are increasingly scrutinizing DEI initiatives when making capital allocation decisions,” McGee noted.

“Furthermore, the risk of reputational damage from DEI-related scandals is substantial and can have severe consequences for a company’s standing.”

Significant Growth and Expansion

Since its launch in 2018, Diversio has experienced a 300% year-over-year growth rate.

Over the past year, the company has doubled its customer base, now serving approximately 400 clients, many of whom were referred through investor portfolios.

Future Investments and Growth Plans

The new funding will be strategically allocated to team expansion.

Diversio currently employs 35 individuals and plans to double that number by year-end, particularly within its new offices in London and New York.

Investments will also be directed towards product development, focusing on more targeted data analysis and enhancements to the recommendation engine.

The company intends to expand its international presence in Europe and the U.K., alongside continued growth in North America.

Diversio is also actively pursuing strategic partnerships, such as collaborations with The 30% Club and various investor groups.

“Our long-term vision involves establishing widely adopted inclusion metrics and creating a platform that facilitates knowledge sharing among companies to refine best practices,” McGee stated.

Investor Perspective on Diversio’s Potential

Meka Asonye, partner at First Round, shared that conversations with Diversio customers revealed a common challenge: recognizing the need for DEI improvements but lacking a clear starting point.

He emphasized that Diversio’s ability to not only measure DEI performance but also facilitate actionable change set it apart from competitors.

Asonye also highlighted the company’s impressive growth trajectory, achieved largely through bootstrapping, as a testament to its value proposition.

“This problem affects companies of all sizes, from startups to large corporations, and despite widespread awareness, a comprehensive solution has remained elusive,” Asonye added.

“Diversio addresses a critical need across the market, and that resonated strongly with our investment team.”