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

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

This argument, described last time in the post of Substack by an anonymous person known as “DeepDelver,” apparently led Insight Partners to analyze the article describing its initial investment of $ 32 million. DeepDelver, which claims to be a former client, alleges that Delve, which raised $300 million during its Series A funding round last year, was manipulating compliance data for its clients.

The original text of the article, written by Insight Partners managing directors Teddie Wardi and Praveen Akkiraju, among others, and titled, “Boosting AI-native compliance: How Delve saves companies time and money in busy compliance,” can be viewed here via the Wayback Machine, an Internet archive that stores web page summaries.

Delve founders Karun Kaushik and Selin Kocalar, along with Insight Partners, did not immediately respond to TechCrunch’s request for comment.

On its website, Delve says it has helped clients like Microsoft, Chase, PayPal, American Express, and AI search company Perplexity cut “hundreds of hours” of busy work. However, it is not clear how many of these companies are still using the platform.

Founded in 2023, Delve says it uses AI to automate the process of obtaining security and regulatory certifications, including SOC 2, HIPAA, and GDPR – standards governing data security, health information privacy, and European data protection, respectively.

In their Substack post, DeepDelver alleged that Delve “included evidence of board meetings, tests, and processes that never happened,” and forced customers to “choose between accepting false evidence or doing more manual work with little automation or AI.”

The document also says that Delve’s rubber stamp platform seals its reports rather than going through a second phase of independent auditing.

Delve has responded to these allegations by saying that it does not issue compliance reports at all, and is instead an “automation platform” that imports information about compliance and provides auditors with access to that information.

Delve also said that its clients “can choose to work with an auditor of their own choosing or choose to work with Delve’s network of independent, accredited third-party audit firms.” Those auditors, the startups say, are “established companies that are widely used across the industry, including other compliance arenas.”

In response to accusations that it provides customers with “false proof,” Delve argued that it simply provides “templates to help teams document their processes according to compliance requirements, as do other compliance platforms.”

While the company denies DeepDelver’s allegations, the disabling of the “book a demo” function and the purging of Insight Partners’ investment concept title suggest that the startup is in damage control, and that investors may be distancing themselves from the company.