Delve halts demos, Insight Partners removes investment post amid ‘false compliance’ allegations.

Delve, a Y Combinator-backed compliance startup accused of fabricating testimonials for its clients, has disabled the “Book a Demo” feature on its website.

The controversy, which was detailed last week in a Substack post by an anonymous whistleblower known as “DeepDelver,” appears to have prompted Insight Partners to delete an article explaining its $32 million investment in the startup. Claiming to be a former client, DeepDelver alleged that Delve, which was valued at $300 million during a Series A funding round last year, fabricated its clients’ compliance data.

The original text of the article, written by Insight Partners managing directors Teddy Wardi and Praveen Akiraju, among others, and titled “Scaling Compliance with Native AI: How Delve Saves Companies Time and Money in Crowded Compliance Works,” remains viewable here via the Wayback Machine, an Internet archive that saves 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 clients such as Microsoft, Chase, PayPal, American Express, and AI research firm Perplexity cut “hundreds of hours” of busy compliance work. However, it is still unclear how many of these companies are still active users of the platform.

Delve, founded in 2023, says it leverages artificial intelligence to automate the security and regulatory certification process, including SOC 2, HIPAA, and GDPR — standards that govern data security, health information privacy, and European data protection, respectively.

In their Substack post, DeepDelver claimed that Delve “fabricated evidence of board meetings, tests, and processes that never happened,” and then forced customers to “choose between adopting fake evidence or performing mostly manual work with little real automation or AI.”

The post also claims that Delve certifies its own reports rather than submitting to a second layer of independent scrutiny.

Delve responded to the accusations by saying that it does not issue compliance reports at all, and that it is instead an “automated platform” that ingests information about compliance and then provides auditors with access to that information.

Delve also said that its clients “can choose to work with an auditor of their choice or choose to work with an auditor from Delve’s network of independent, accredited third-party audit firms.” These auditors are “established companies that are widely used across the industry, including other compliance platforms,” the startup said.

In response to the accusation that it provides clients with “fake evidence,” Delve responded that it simply provides “templates to help teams document their processes against compliance requirements, as other compliance platforms do.”

While the company denies DeepDelver’s claims, the disabling of the “Book a Demo” function and the deletion of Insight Partners’ investment thesis article suggest that the startup is in a damage control phase, and that investors may be distancing themselves from the company.