By Tom Ballard, Chief Alliance Officer, PYA
Just a few days after announcing a Phase II Small Business Innovation Research (SBIR) award from the U.S. Air Force’s AFWERX program (see Friday’s teknovation.biz article here), RegScale made an even bigger announcement yesterday – more than 20x in terms of dollar value.
The leading continuous compliance automation software company with headquarters in Tysons Corner, VA and its research and development operation in Knoxville announced the completion of a $20 million Series A funding round led by SYN Ventures, a West Palm Beach, FL firm that says it is “funding the cyber revolution.” Also participating were San Francisco-based SineWave Ventures, Virginia Innovation Partnership Corporations’s Virginia Venture Partners, SecureOctane, also based in San Francisco, and several strategic investors.
The funding will primarily be used to drive sales and marketing initiatives initially targeted in the company’s three primary markets – government, financial institutions, and energy and utilities – and accelerate product development to meet the needs of customers globally.
“RegScale is leading the way in ‘shifting left’ compliance to accelerate digital transformation programs, reduce risk, and lower the costs of manual compliance documentation while delivering rapid time-to-value which our customers are demanding,” said Anil Karmel (pictured right), Co-Founder and Chief Executive Officer of the start-up that was second runner-up in the 2022 edition of the PYA-sponsored “Ballard Innovation Award” that recognizes the region’s most promising new innovation companies.
RegScale was spun out of C2 Labs by Karmel and Co-Founder Travis Howerton as announced in this November 2021 teknovation.biz article. Both were Founders of C2 Labs. Karmel is based in Washington while Howerton serves as Chief Technology Officer, leading the R&D team in the Innovation North Building at the University of Tennessee Research Park.
“We are launching the ‘RegOps’ (Regulatory Operations) Movement to help heavily regulated organizations evolve and improve compliance and trust at a faster pace than organizations using traditional compliance artifact development and compliance management processes,” Karmel explained.
Since the company launched eight months ago, RegScale has recorded triple digit revenue growth with nearly 8,000 downloads of its freemium “Community Edition” platform and signing more than a dozen major customers for its “Enterprise Edition” platform. This new round of funding will also allow the company to expand operational support to meet growing customer demand.
“As we begin to scale up the company as part of the Series A investment, it was critical that we have access to the best talent to support our R&D division,” Howerton (pictured left) said. “Being in the University of Tennessee Research Park at Cherokee Farm has given us access to faculty, staff, and an ecosystem of fellow entrepreneurs that can advise us, staff our positions, and help us grow and improve our platform.”
Howerton added that “it is exciting to be part of the growing start-up ecosystem in Knoxville and to add this funding round to the growing list of successes that we have seen recently with Techstars in Knoxville. We hope to be a blueprint to show other investors that it is possible to build a large and successful technology business in Knoxville so that the path to funding for future East Tennessee entrepreneurs is easier for them.”
Art Coviello Jr., Investment Committee Chair for SYN Ventures and a new member of the RegScale Board of Directors, noted in the news release that “cyber compliance has become a $10.5 trillion existential challenge, and major industry trends in technology are focused on new and innovative approaches to solve this complex and evolving dilemma for heavily regulated organizations. SYN Ventures exists to empower companies like RegScale that are succeeding in creating transformational and disruptive solutions that significantly reduce technology and compliance risk.”
“At RegScale we believe that maintaining compliance as a business should be affordable, transparent, and easy,” Howerton added. “That is why we are dedicated to ensuring that our entire customer base is able to continuously comply with multiple requirements leveraging a scalable platform that can meet the needs of the entire organization, no matter the sector or industry.”