Hyperproof raises nearly $3M

Hyperproof, a Northwest startup that helps companies comply with state and international privacy and data protection laws, has raised nearly $3 million from angel investors.

The Bellevue, Wash.-based company launched in 2018 and raised an additional $3 million in an earlier seed round.

Hyperproof founder and CEO Craig Unger cautioned that with so much work now happening remotely, and healthcare being provided online due to the novel coronavirus, it’s more important than ever that companies are safeguarding sensitive digital information.

“Compliance with data privacy regulations can feel like an additional burden — especially as you’re working quickly to protect your community,” Unger said. “As organizations take measures to prevent the spread of COVID-19 (the disease caused by coronavirus), new compliance challenges emerge, so it’s important to remain diligent.”

Craig Unger, founder and CEO, Hyperproof, with peacock. (Hyperproof Photo)

The startup announced that it’s offering some of its cloud compliance services for free to U.S. organizations. The services are focused on complying with the California Consumer Privacy Act (CCPA) and the EU’s General Data Protection Regulation (GDPR). “Hyperproof is making these programs available due to the increasing amount of personally identifiable information that needs to be exchanged at record speeds in order to protect our communities,” according to a company statement about the free tools.

Hyperproof also offers video conferencing via Zoom to help companies’ compliance teams work with privacy auditors. The conferences can be stored within Hyperproof’s system of record.

Before launching Hyperproof, Unger co-founded Azuqua in 2013. The cloud-based integration and automation company was acquired by Okta two years ago. Previous to that, Unger was at Microsoft for nearly 20 years where his last role was general manager of Dynamics CRM.

At Azuqua, Unger found that employees were spending hours responding to customer questionnaires about data security and privacy and preparing for audits. The exercises were time consuming and inefficient with information needed to answer the questions stored in multiple places.

Unger saw the need for a better service and pulled together a team with decades of experience in enterprise software applications, cloud services and operating systems to build Hyperproof. He wanted to create something that offered continuous compliance with the regulations — not just a periodic fix to meet audit requirements.

“We didn’t just get into this because it’s a good business opportunity,” Unger said.

After so many years in technology, he and others working with him wanted to make a positive a difference in the sector. That sense of purpose was a key motivation for taking on the challenges of launching a startup.

“You have to be really passionate about the journey that you’re going on,” Unger said. “The best reason to do a startup is not to get your name in lights, but because you want a particular change to happen in the world and you feel compelled to bring that change.”

We caught up with Unger for this Startup Spotlight, a regular GeekWire feature. Continue reading for his answers to our questionnaire.

What does your company do? Hyperproof removes the pain from compliance. It’s the first-ever compliance operations SaaS designed to give compliance professionals the ability to easily collect evidence (to verify the efficacy of internal controls) and efficiently collaborate with stakeholders in and outside of their organization.

This not only helps organizations utilize their resources in the most efficient way, it ultimately helps organizations mitigate their risks on an ongoing basis — which is especially important in a time when the chances of experiencing a data breach and compliance violations are quite high.

Screen shot of a Hyperproof tool called CrossWalks that helps users avoid duplicating work in order to meet multiple compliance standards. (Hyperproof Image)

Inspiration hit us when: Historically, companies have relied on antiquated methods such as spreadsheets and file systems to manage compliance efforts. After personally filling out endless 200-question surveys, I knew there had to be a better way. The process was manual, error-prone, redundant and was, to be frank, universally reviled by everyone who had to participate in it outside of dedicated compliance professionals.

I was witnessing an increased need for compliance tools, and I was ready to create the solution along with my small and focused team of experienced enterprise software designers and developers.

VC, Angel or Bootstrap: This week we announced nearly $3 million in additional funding from more than 15 angel investors. Added to a previous seed round of fundraising in 2018 and last year, that brings our total to $6 million raised. The new infusion will be used to scale up Hyperproof’s operations, invest in R&D and accelerate marketing and sales activities.

Our ‘secret sauce’ is: Our team of enterprise software vets! As for our differentiation in the market, it is in how quickly you can implement our app to become a lot more organized and knowledgeable about the state of your compliance program. Once you’re set up, you can see in real-time what the gaps are in your control environment, who needs to do what, by when. It’s easy for a compliance manager to keep all stakeholders on track and do the work efficiently.

The smartest move we’ve made so far: The smartest thing we do here is to obsessively talk to customers and stay focused on the knowledge and insight that results. We have conducted more than 200 customer interviews, the patterns have been striking and the pain has been consistent. We come to work every day to relieve this pain. So in that respect, our product has been designed by our customers with a little bit of refinement from us here at the company.

The biggest mistake we’ve made so far: We were cautious in building our team upfront, and we hired really smart people when we kicked off. A few months in, we’ve made some more strategic hires on the partnership front that if I could have done it over again, I would have invested in way sooner.

Which leading entrepreneur or executive would you most want working in your corner? Tony Stark — also known as Iron Man! To me, Tony Stark represents amazing storytelling applied to technology businesses. Today a decision to start a fast-growing tech business is a decision to start a publishing/communications company. Beyond the product, you must produce great content and deliver it in a firm, future-focused voice that is unapologetic about what the company is trying to achieve. I could also dispatch Tony to reduce would-be competitors to rubble!

Our favorite team-building activity is: We love to hang out by the big table, there are chairs for everyone and we get to enjoy Free Lunch Friday! When the food is delivered, it usually arrives without labels describing who ordered it. Each of us loves trying to grab the best looking entree and come up with plausible justifications as to why we thought it was the one that we ordered.

The biggest thing we look for when hiring is: In every interview, I try to identify a candidate’s conflict management style. Sure we want to avoid conflict, but the way a person confronts conflict says a lot. At the end of the day, it’s about finding the solution to a problem — this is something I learned from my time working with Bill Gates at Microsoft. As a leader, he’s tough but fair. It was not always about winning, but instead, about getting to the right answer.

What’s the one piece of advice you’d give to other entrepreneurs just starting out: When you’re a new founder, you’re expected to do a lot of different things. I’d say it’s like making a meal: Everything has to come out of the oven at the same time for your dinner party to be a success. The same goes for a startup. You have to be sure everything is synchronized otherwise you lose a ton of productivity. To do this you have to be able to become a bit of a Jack of all trades. Some companies will get around that by having multiple founders, but my advice would be to keep learning new skills in the areas you may have stepped into the company knowing less about.

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