Danish startup Whistleblower Software has undergone a significant transformation, rebranding itself as Formalize as it ventures into the broader sphere of compliance software. This strategic shift is accompanied by a fresh infusion of €15 million ($16 million) to fuel its expansion.
Key Takeaway
Whistleblower Software, now known as Formalize, has rebranded and secured
6 million in funding to expand into the compliance software sphere, capitalizing on the burgeoning market driven by regulatory pressures.
Expanding Compliance Software Market
The compliance software market has experienced a substantial surge, largely attributed to escalating regulatory pressures. Investors have been quick to recognize this trend, as evidenced by Thoma Bravo’s recent acquisition of German compliance and investor relations software company EQS Group in a $435 million deal. Additionally, several startups, including Cypago, Hyperproof, Certa, and Anecdotes, have secured significant venture funding for various compliance software offerings.
Formalize’s Ambitious Pursuit
Formalize, led by co-founder and CEO Jakob Lilholm, aims to claim a larger share of the $54 billion GRC (governance, risk, and compliance) market. According to Lilholm, the robust regulatory agenda in the EU has been a driving force behind the booming compliance software market. He emphasized the need for efficient management tools to alleviate the burden of compliance on companies.
Empowering Whistleblowers
Formalize’s emergence coincided with the implementation of Europe’s new whistleblowing directive, mandating larger companies to establish internal reporting systems for whistleblowers. The software enables employees to file reports anonymously in writing, with additional provisions for voice-distorted oral reporting. Notably, Formalize already boasts prominent clients such as McDonald’s, Gap, and ABN-AMRO.
Venturing into Compliance
Having previously raised a $3 million seed round, Formalize is now poised to diversify its offerings with a new compliance platform. This platform is designed to streamline and automate the myriad compliance requirements imposed by regulations such as GDPR and NIS2 cybersecurity provisions. By integrating with existing systems, Formalize’s solution enables comprehensive risk assessments, incident reports, and mapping of data processing activities.
Strategic Evolution
As Formalize expands its focus beyond whistleblowing, co-founder and CTO Kristoffer Abell emphasized the interconnectedness of data compliance and whistleblowing within the framework of GDPR regulation. The company’s rebranding from Whistleblower Software reflects its pivot towards a more expansive and lucrative market encompassing various compliance areas.
Formalize’s €15 million Series A round saw France’s BlackFin Capital Partners leading the investment, with participation from the startup’s seed round lead investor, London-based West Hill Capital.
