Delve halts demos, Insight Partners scrubs investment pitches amid ‘false compliance’ allegations

Delve halts demos, Insight Partners scrubs investment pitches amid 'false compliance' allegations

Delve, a Y Combinator-backed compliance startup accused of fabricating certifications for its clients, has disabled the “book a demo” feature on its website.

The controversy, detailed last week in a Substack post by an anonymous whistleblower known as “DeepDelver,” has apparently also prompted Insight Partners to scrub an article explaining its $32 million investment in the startup. DeepDelver, which claims to be a former client, alleged that Delve, which was valued at $300 million during its Series A funding round last year, manufactured compliance data for its clients.

The original text of the article, written by Insight Partners CEOs Teddie Wardi and Praveen Akkiraju, among others, and titled “Scaling AI-native compliance: How Delve is saving companies on compliance busywork,” remains viewable here via the Wayback Machine, an Internet archive that preserves web page snapshots.

Delve’s co-founders Karun Kaushik and Selin Kocalar, as well as Insight Partners, did not immediately respond to TechCrunch’s request for comment.

On its website, Delve claims to have helped clients such as Microsoft, Chase, PayPal, American Express and AI search firm Perplexity cut “hundreds of hours” off the hustle and bustle of compliance. However, it is still unclear how many of these companies are still active users of the platform.

Founded in 2023, Delve says it leverages AI to automate the process of achieving security and regulatory certifications, including SOC 2, HIPAA, and GDPR — standards that govern data security, health information privacy, and European data protection, respectively.

In their Substack post, DeepDelver claimed that Delve “fabricated evidence of board meetings, tests and processes that never happened,” and then forced customers to “choose between adopting fake evidence or doing mostly manual work with little real automation or AI.”

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The post further claims that Delves’ platform rubber-stamps its own reports instead of going through another layer of independent review.

Delve responded to the allegations by saying that it does not issue compliance reports at all and is instead an “automation platform” that ingests compliance information and then provides auditors with access to that information.

Delve also said its clients “can choose to work with an auditor of their choice or choose to work with one from Delve’s network of independent, accredited third-party audit firms.” These auditors, the startup said, are “established firms used widely across the industry, including by other compliance platforms.”

In response to the charge that it provides customers with “false evidence,” Delve countered that it simply offers “templates to help teams document their processes in line with compliance requirements, just like other compliance platforms.”

While the company denies DeepDelver’s claims, the deactivation of the “book a demo” feature and the scrubbing of Insight Partners’ investment thesis article suggest that the startup is in damage control and that investors may be distancing themselves from the company.

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