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LogicGate, a provider of software-as-a-service solutions for governance, risk, and compliance (GRC) management, today announced that it raised $113 million in funding from PSG and Greenspring Associates. The company says that the proceeds will be used to advance key platform capabilities as well as bring new products to market, supporting the growth of LogicGate’s partner ecosystem, expanding its international presence, and improving its security posture.
Risk can deeply impact a company’s ability to operate. But despite this, research suggests that organizations aren’t doing sufficient due diligence. A Refinitiv survey revealed that enterprises, which deal with an average of nearly 10,000 third-party relationships, often fail to thoroughly investigate third parties during onboarding. A separate survey — from Compliance Week — revealed that 65% of organizations have adopted what might be considered reactive policy management programs as opposed to maturing or advanced programs.
LogicGate seeks to help companies address the shortfall by identifying, assessing, and monitoring for potential business risks. Designed to integrate with existing governance and third-party screening tools, LogicGate’s platform enables clients to access, analyze, collaborate, and manage compliance data in real time.
Jon Siegler, Dan Campbell, and CEO Matt Kunkel founded Chicago, Illinois-based LogicGate in 2015 after working together at Navigant, where they deployed legacy GRC solutions for large enterprise clients. Kunkel says they saw the substantial investments organizations were making in solutions that still needed significant customizations to work for the organizations in the end.
“Every time a compliance regulation changed, organizations would have to bring a consultant back in and spend more time and money reworking their … solution to fit the new legislation. There was clearly a need for more flexible solutions,” Kunkel told VentureBeat via email. “[T]hat’s what led to us conceptualizing and developing [LogicGate’s] risk cloud platform. When companies use our risk cloud platform, they don’t need teams of specialists or a coding background to stand up a risk program. The platform is easy to use, quick to deploy, and grows with you.”
Operationalizing risk management
According to Gartner, the integrated risk management (IRM) market is poised to grow 12.6% in 2021, reaching upwards of $9.3 billion by 2023. In a report published by the consultancy, the top three risk management priorities for companies — a greater focus on building operational resilience, business model resilience, and balancing risk interdependencies and cross-functional response — all require an IRM approach.
IRM entails practices that improve decision-making and performance through a view of how well an organization manages its unique risks. According to Kunkel, technology can be a part of this, considering many organizations manage risks in spreadsheets and legacy systems like LogicManager, RSA Archer, and MetricStream.
“LogicGate offers an agile, cloud-based solution designed to replace spreadsheets, increase cybersecurity, provide scalability through digital transformation, give companies tools to better collect, analyze and use big data, and promote growth,” Kunkel said. “[Its] suite of risk management solutions blends flexibility and out-of-the-box functionality for organizations to manage their risk with confidence in an easy-to-use, drag-and-drop interface in a no-code environment.”
Using LogicGate, businesses can map risk and compliance frameworks with a library of prebuilt apps for enterprise risk, third-party risk, and privacy management. The platform can spotlight connections between mitigations and existing risk as well as third-party and controls-management processes. Moreover, it offers a centralized location for documents and dashboards with reporting, documentation, and signoff features to help keep track of compliance operations.
Kunkel says this all results in easier-to-identify high-risk relationships and workflows, leading to controllable data and mitigated data breach risk. “GRC has always been a back-office function. No one ever thought much about it, until about March of 2020. It wasn’t until they were faced with unprecedented health, safety, and financial risks exacerbated by the pandemic that many organizations reconsidered their focus on GRC and cyber risk,” Kunkel added. “Over the past year, we’ve seen how integral the GRC function has become to the stability of a business and its ability to weather a pretty turbulent storm. While many business leaders previously associated GRC solely with asset protection and cost reduction, organizations have a clearer understanding of how it can impact topline revenue, helping to win business and drive success.”
Reflecting the growing investment in GRC, LogicGate’s annual recurring revenue grew more than 80% from 2019 to 2020. The company, which employs over 174 people full-time, claims to have hundreds of customers, including brands like SoFi, Zurich Insurance, Memorial Hermann Health, and Cimpress.
“We’re finalizing a risk quantification solution for the platform which launches in Q3, and we’ve been hiring aggressively for a variety of positions and will continue to bring on more personnel through the next 18 months to accommodate our growth,” Kunkel said. “Investments in risk tech have never been so important. Finally, GRC is in the spotlight.”
The latest round of financing brings LogicGate’s total raised to date to $156 million.
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