Convercent, a Denver-based startup, announced today it has raised a $10 million Series B round. The startup is developing cloud-based software for companies looking to improve governance, risk management, and compliance procedures.
SAP Ventures led the round and managing director Doug Higgins will join Convercent’s board. The investment in Convercent is the first investment SAP Ventures has made from its new $650 million SAP Ventures Fund II. The firm’s portfolio includes LinkedIn, Fitbit, Box, and Denver-based Ping Identity. SAP Ventures is affiliated with enterprise software company SAP (NYSE: [[ticker:SAP]]), but while SAP is SAP Ventures’ only limited partner, the VC firm makes its own investment decisions.
The deal puts Convercent in good company and is a testament to its early momentum, Convercent CEO Patrick Quinlan said.
“We think it’s great validation that [the round closed] so close on the heels of the launch of our company,” he said.
Convercent’s strategy is to make it easier and cheaper for companies to distribute things like ethics and expense reimbursement policies to employees. Information about policies is stored online and can be updated easily, and managers can run campaigns through online dashboards and see whether employees have read or watched instructional material.
Convercent’s pitch is that it provides a cheaper way to make sure employees are understanding policies and stay on the right side of regulations.
Convercent launched early this year with a $10.2 million Series A round. The investors—Azure Capital, Rho Capital Partners, and Mantucket Capital— joined the Series B round. City National Bank also agreed to increase Convercent’s debt facility. About 10 percent of the $20.2 million Convercent has raised is debt, Quinlan said.
The new funds enable Convercent to “go faster” on the course it has been following, Quinlan said.
The company already is going pretty fast. Convercent has grown to about 70 employees. It also has tried to make a splash on the Denver startup scene, in part by hosting events at its new office in a redeveloped industrial space.
It has worked even harder to build its profile among potential clients. In the company’s eyes, that’s any firm that needs to make sure employees follow its policies and wants to track its corporate culture.
“We’ve made a huge investment in marketing this year,” Quinlan said. He believes it has paid off in customer and revenue growth that’s improved from quarter to quarter. Convercent does not disclose revenue numbers.
While Convercent hopes to make inroads with enterprises that use SAP products, the investment from SAP Ventures does not establish a direct relationship between Convercent and SAP, Quinlan said.
