Vault Platform Secures $8.2M Series A Funding - Gradient Ventures

Revolutionizing Workplace Misconduct Reporting: Vault Platform Secures $8.2 Million Series A Funding

London-based Vault Platform, dedicated to improving workplace misconduct reporting systems, has received a significant investment. Google’s AI-focused fund, Gradient Ventures, led an $8.2 million Series A funding round announced today.

Investment Details and Existing Backers

In addition to Gradient Ventures, Illuminate Financial participated in this funding round. Existing investors, including Kindred Capital and Angular Ventures, also contributed. Previously, Vault closed a $4.2 million seed round in 2019.

A SaaS Solution for Proactive Ethics Management

Vault provides a comprehensive suite of SaaS tools designed for large enterprises and rapidly scaling companies. These tools proactively manage internal ethics and integrity concerns.

The platform includes features for staff to report issues, alongside robust data and analytics capabilities. This supports customers’ broader audit and compliance needs.

AI Integration and Future Development

According to co-founder and CEO Neta Meidav, Gradient Ventures’ interest extends beyond simply upgrading traditional reporting methods like hotlines. They are keen on exploring the potential of artificial intelligence to enhance Vault’s reporting tool.

Vault’s current “GoTogether” feature utilizes an escrow system. Reports are submitted only if the user isn’t the sole reporter of the issue concerning a specific individual. This encourages employees to voice concerns they might otherwise hesitate to share.

Expanding GoTogether with Natural Language Processing

Vault intends to broaden the capabilities of “GoTogether” to identify problematic conduct affecting entire teams or divisions.

This expansion will leverage natural language processing to detect patterns and connections in reported activity. The goal is to proactively surface potential issues.

Identifying Systemic Issues, Not Just Individuals

“Our algorithms currently match on the identity of an alleged perpetrator,” explains Meidav. “However, many reports don’t relate to a specific person; they can be more descriptive.”

For example, a report might detail irregularities in departmental accounting, raising suspicions of corruption or fraud.

Learning from Past Workplace Crises

Meidav draws parallels to major workplace misconduct disasters like the Volkswagen “Dieselgate” scandal and issues at Boeing.

“The common denominator in these cases is a serious ethical breach observed by multiple people within the organization, but the connections weren’t made,” she states.

Vault aims to connect these repeated events, alerting company boards to potential “hot pockets” requiring investigation. This proactive approach can mitigate significant financial, reputational, and even human costs.

Defensibility Through AI and Continuous Investment

The “GoTogether” feature’s core idea isn’t patentable, raising questions about its defensibility. Vault believes integrating advanced AI capabilities will create a competitive advantage.

“We are continuing to invest in the technology underpinning our platform,” says Meidav. “Gradient’s investment will further enhance this aspect of our business.”

Industry Validation and Expert Commentary

Anna Patterson, founder and managing partner at Gradient Ventures, commented on the funding: “Vault tackles an important space with an innovative and timely solution.”

She added that Vault’s data-driven approach addresses challenges like fraud, bribery, safety failures, and general misconduct, positioning them for success in the modern workplace.

A Competitive Landscape

Founded in 2018, Vault is entering a growing market. While focused on disrupting legacy hotline systems, several other startups are also competing in this space.

Examples include AllVoices, Whispli, Hootsworth, and Spot.

Regulatory Drivers and Increasing Demand

Competition is expected to intensify as workplace reporting regulations become stricter.

The upcoming EU Whistleblower Protection Directive, requiring companies with over 250 employees to implement reporting solutions by the end of 2021, is a key driver of demand for “trust tech” solutions like Vault.

Bridging Internal Gaps and Expediting Investigations

A platform solution can also facilitate communication between internal teams involved in addressing complaints. Anonymous chat features enable direct communication with reporters, accelerating investigations.

U.S. Regulatory Scrutiny and the Rise of SPACs

Meidav highlights increased attention from U.S. regulators regarding workplace misconduct reporting. Recent substantial awards to whistleblowers, such as the $28 million payout in the Panasonic Avionics case, demonstrate this trend.

The growing number of companies going public via SPACs (Special Purpose Acquisition Companies) also increases reporting requirements, as these companies often face less regulatory scrutiny initially.

Market Validation and a Focus on Empowerment

“Just a few years ago, I had to convince investors that this was a viable category,” says Meidav. “Now, we have a growing market with increasing competition.”

“What truly differentiates Vault is our focus on leveraging technology to empower more misconduct to surface internally and enable employees to speak up in new ways. ‘GoTogether’ is unique, as are our operational capabilities.”

Customer Success Stories and Real-World Impact

A customer in the oil and gas sector utilized Vault’s anonymous chat feature to provide employees with a secure direct line to company leadership.

“That’s incredible,” says Meidav. “It’s a progressive and forward-looking way to utilize this tool.”

Current Customer Base and Future Growth

Vault currently serves around 30 customers, primarily in the U.S. and EU.

Its customer base includes both enterprises and rapidly scaling companies, such as Lemonade, Airbnb, Kavak, G2, and OVO Energy.

The Importance of Culture During Hypergrowth

Scaleups are particularly receptive to Vault’s solution, as rapid headcount growth can strain company culture.

“They are sensitive to scandals that can greatly impact them,” explains Meidav. “During hypergrowth, it’s crucial for leadership to safeguard culture. A tool like Vault can be invaluable.”

Team Expansion and Continued Innovation

With the Series A funding secured, Vault plans to expand its team and accelerate its growth trajectory.

The company is committed to providing a robust misconduct reporting solution for its own operations, demonstrating its dedication to its mission.