After being accused of manipulating authentication for its customers, Y Combinator-backed compliance startup Delve has disabled the “Schedule a Demo” feature on its website.
The controversy, posted on Substack last week by an anonymous whistleblower known as “DeepDelver,” led Insight Partners to remove an article detailing its $32 million investment in the startup. DeepDelver, which claims to be a former customer, alleged that Delve, which was valued at $300 million in its Series A funding round last year, manipulated compliance data for its customers.
The original article, written by Insight Partners Managing Directors Teddie Wardi and Praveen Akkiraju, titled “Scaling AI-Driven Compliance: How Delve Saves Companies Time and Money on Compliance Work,” is still available here via the Wayback Machine, an Internet archive that preserves snapshots of web pages.
Delve co-founders Karun Kaushik and Selin Kocalar and Insight Partners did not immediately respond to TechCrunch’s request for comment.
Delve claims on its website that it has helped customers such as Microsoft, Chase, PayPal, American Express and AI search company Perplexity save “hundreds of hours” from their compliance work. However, it’s unclear how many of these companies are still actively using the platform.
Founded in 2023, Delve says it leverages 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 a Substack post, DeepDelver claimed that Delve “manipulated evidence of board meetings, tests, and processes that never happened” and then forced customers to “choose between accepting fake evidence or performing manual tasks with little real automation or AI.”
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The post also claims that Delve’s platform stamps its own reports without going through a second layer of independent auditing.
Delve responded to the criticism by saying that it does not issue compliance reports at all and is instead an “automated platform” that collects information about compliance and then provides auditors with access to that information.
Delve also said customers “can work with an auditor of their choice or with an auditor who is part of Delve’s network of independent, accredited third-party audit firms.” The auditor is “an established company that is widely used across the industry, including across other compliance platforms,” the startup said.
Delve countered accusations that it provides “fake evidence” to customers, saying it simply provides “templates to help teams document their processes in line with compliance requirements, like other compliance platforms.”
Although the company denies DeepDelver’s claims, disabling the “schedule a demo” feature and removing Insight Partners’ investment thesis article suggests the startup may be doing damage control, and investors may be distancing themselves from the company.
