KarmaCheck, a startup that provides background-checking services and is led by Eric Ly, a co-founder of LinkedIn, has successfully secured $45 million in funding. The funding round was led by Parameter Ventures. The company, based in San Francisco, aims to utilize the funds to expedite the advancement of its technology and to expand into new industry sectors. This development is significant due to the increasing number of companies seeking to streamline complex, labor-intensive, or repetitive HR tasks through technology.
The demand for services such as criminal background checks and education verification has risen substantially as a result of the popularity of remote work following the pandemic. KarmaCheck’s clients include major companies such as Domino’s Pizza (DPZ.N), McDonald’s (MCD.N), and various players in the healthcare and gig economy industries. The company claims to provide results almost twice as fast as traditional methods for such checks. NextView Ventures, PruVen Capital, and Velvet Sea Ventures also participated in the company’s latest funding round.
Established in 2019 by Eric Ly, who served as LinkedIn’s founding CTO, KarmaCheck has experienced significant growth, employing over 100 individuals and reporting a sevenfold increase in revenue in 2023. The company’s competitors include Checkr, First Advantage (FA.O), and Sterling Check (STER.O). First Advantage reached an agreement to acquire Sterling in a $2.2 billion deal in February. Additionally, Apple has announced delays in the launch of certain AI products in Europe, attributing the holdup to EU rules.
Here are some key quotes from Eric Ly: “Background checks and credentialing have traditionally been one of the most time-consuming and frustrating aspects of the hiring process. It has been a major source of friction for both employers and job-seeking candidates.”