Governance, risk management and compliance (GRC for short) remains one of the most active startup areas in terms of venture capital investments. According to Tracxn, the private market data tracker, the approximately 1.500 vendors selling GRC software had received $28.700 billion in funding through 2021.
No wonder there is so much interest. GRC helps organizations better manage risk while remaining compliant with regulations, and there are an increasing number of regulations to worry about.
One of the latest companies to benefit from the boom is anecdotes, which aims to streamline GRC tasks through automated workflows, plugins, and application integrations. Anecdotes announced that it raised $25 million in a financing round Serie B led by Glilot Capital Partners with the participation of Vertex, DTCP, Red Dot Capital Partners, Vintage Investment Partners and Shasta Ventures.
With a total of $55 million raised by Anecdotes, the tranche, which the company described as "oversubscribed," will go toward expanding into new markets and doubling Anecdotes' 60-person team over the next 12 to 24 months, the company said. co-founder and CEO Yair Kuznitsov.
Kuznitsov and Roi Amior met while working at cybersecurity startup IntSights before it was acquired by Rapyd7. While there, they encountered GRC-related challenges, including repetitive and time-consuming audits.
Inspired to create a better solution, Kuznitsov and Amior jointly launched Anecdotes.
“We wanted to reinvent enterprise GRC as it is offered today: data-driven, automated, efficient, personalized and meaningful for GRC and other stakeholders,” Kuznitsov said. “Anecdotes is redefining compliance and risk management by transforming it from a labor-intensive task with skyrocketing associated costs to data-driven processes.”
The Anecdotes platform automatically collects GRC-related “artifacts” (i.e., data and logs) from sources including an enterprise's public clouds, on-premises data centers, private clouds, and software-as-a-service tools. Data is placed in a central point where users can initiate compliance activities (e.g. policy management, user access reviews, etc.).
A relatively new addition to the center is the AI Toolkit, which provides a list of risks, controls, and policies for deploying generative AI applications in production environments. AI Toolkit is open source and, Kuznitsov says, was created in collaboration with “industry-leading” experts.
The toolkit aims to equip organizations, specifically GRC teams, with the framework to enable the use of GenAI tools while ensuring that continue to comply and avoid exposure to risks", explained Kuznitsov.
Anecdotes' competitors include VComply, a risk management and compliance startup that has so far raised more than $10 million in venture capital, and Cypago, which aims to automate compliance and governance for companies. There are also larger players like Certa, which landed a $35 million investment from Fin Capital, Vertex Ventures and others in early 2023.
Kuznitsov says Anecdotes is well positioned, with around 100 clients, including Snowflake, Coinbase SoFi, Grafana, and Payscale.
“We have a healthy SaaS model. We are selling millions of dollars with tripled growth year after year… Anecdotes demonstrated how to find product-market fit and its ability to serve business customers. The next phase of growth requires additional capital to further accelerate global expansion and product innovation,” he added.
