LogicGate Raises $113M To Take Risk Management Tool Global

LogicGate plans to use its Series C proceeds to provide strategic insights to high-level executives around risk by leveraging machine learning, artificial intelligence, and statistical modeling, says CEO Matt Kunkel.

LogicGate has closed a $113 million funding round to push into risk quantification and prioritization and expand its business abroad.

The Chicago-based governance, risk, and compliance (GRC) startup plans to use its Series C proceeds to provide strategic insights to high-level executives around risk by leveraging machine learning, artificial intelligence, and statistical modeling, said CEO Matt Kunkel. The expanded offering will capitalize on LogicGate’s existing aggregation capabilities around risk, regulatory, compliance and security data.

“The capital that we raised can provide us with the fuel that we need to continue building market share,” Kunkel told CRN. The funding round was led by growth equity firm PSG and included participation from Greenspring Associates.

[Related: 15 Top IT Risk Management Leaders: Gartner Magic Quadrant]

LogicGate was founded in 2015, employs approximately 180 people, and has raised $156 million. The company most recently closed a $24.8 million Series B funding round in December 2019 led by High Alpha and Jump Capital.

The company plans to use the data captured through its own apps and integrations with other systems to drive the statistical models that risk quantification is based upon, according to Kunkel. From there, LogicGate said it’ll work with customers to define their strategic objectives and link different risk vectors to those strategic objectives.

This should provide the customer with a firm understanding of where their risk lies, allowing them to take action to mitigate that risk so that more risk can be assumed at a later point in time, Kunkel said. LogicGate also plans to continue investing in product development, scalability, flexibility, and ease of use for its existing platform to help the company move upstream from mid-market to enterprise customers.

LogicGate wants to expand its international customer base from 10 percent today to 20 percent 12-to-18 months from now via significant investment in the United Kingdom and European Union countries. European businesses face more compliance and regulatory requirements than American ones and tend to be hyper-tuned and forward-thinking as far as risk is concerned, according to Kunkel.

The company set up shop in the United Kingdom two months ago, and plans to aggressively onboard sales, customer success, implementation, and support professionals to support international expansion, Kunkel said. Between international go-to-market hires and significant expansion from a product engineering perspective, LogicGate expects to double its headcount over the next 12-to-18 months.

As far as the channel is concerned, Kunkel said LogicGate is looking to expand its share of business flowing through partners from less than 20 percent today to approximately 40 percent 18-to-24 months from now. LogicGate has primarily leveraged direct customer relationship to serve the mid-market, but as the company looks to push into the enterprise space, capitalizing on partner relationships will be key.

LogicGate works with 30 solution providers today from resellers and referral partners to advisory services and implementation firms and is looking to double that figure over the next year or two, Kunkel said. Advisory services relationships both within and outside of the Big Four have been particularly fruitful as consultancies look for ways to operationalize and automate their risk management programs.

Going forward, Kunkel said existing partners will benefit from joint events and co-marketing and co-branding opportunities with LogicGate, webinars, quarterly business reviews, and product showcases to understand the full breadth of the company’s capabilities. All told, Kunkel hopes the Series C funding will drive annual recurring revenue (ARR) growth for LogicGate as well as increased net revenue retention.

“We’re excited to continue working with the channel community,” Kunkel said. “The channel provider adds a lot of value to customers.”