Y Combinator-backed compliance startup Delve has disabled the “Book a Demo” feature on its website after being accused of fabricating credentials for its customers.
The controversy, detailed last week in a Substack post by an anonymous whistleblower known as “DeepDelver,” has apparently led Insight Partners to remove an article describing its $32 million investment in the startup. DeepDelver, which claims to be a former customer, has alleged that Delve, which was valued at $300 million in a Series A funding round last year, fabricated compliance data for its customers.
The original article titled “Scaling AI-Native Compliance: How Delve is Saving Enterprises Time and Money on Compliance Hectic Work,” written by Teddie Wardi, Managing Director of Insight Partners, Praveen Akkiraju, and colleagues, remains available via the Wayback Machine, an Internet archive that stores snapshots of web pages.
Delve co-founders Karun Kaushik and Selin Kocalar, as well as 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 firm Perplexity save “hundreds of hours” of compliance red tape. However, it is unclear how many of these companies are still active users of the platform.
Founded in 2023, Delve says it leverages AI to automate the process of obtaining security and regulatory certifications such as SOC 2, HIPAA, and GDPR (standards governing data security, health information privacy, and European data protection, respectively).
In a post on Substack, DeepDelver claimed that Delve “fabricated evidence of board meetings, tests, and processes that never happened” and forced customers to “choose between adopting fake evidence or doing mostly manual work with little actual automation or AI.”
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The post further claims that Delve's platform rubber-stamps its own reports without a second layer of independent auditing.
Delve responded to the accusations by saying the company does not issue any compliance reports, but instead is an “automated platform” that captures compliance information and provides auditors with access to that information.
Delve also said that customers can “choose to work with an auditor of their own choice or with an auditor from Delve's network of independent, certified third-party audit firms.” The company says these auditors are “established companies that are widely used across the industry, including by other compliance platforms.”
In response to accusations that it provides “fake evidence” to customers, Delve countered that it only provides “templates to help teams document processes in accordance with compliance requirements, like other compliance platforms.”
Although the company denies DeepDelver's claims, the disabling of the “Schedule a Demo” feature and the removal of Insight Partners' investment thesis article suggest that the startup is undergoing damage control and investors may be distancing themselves from the company.