Delve’s co-founders are delving into all-out defense mode in the wake of fraud allegations and the loss of the $300 million compliance startup’s biggest investor, Y Combinator.
In a video statement posted to X on Friday night, chief executive officer Karun Kaushik and chief operating officer Selin Kocalar denied recent claims that Delve provided “Potemkin audits”—digitally fabricated security certifications—to hundreds of unsuspecting clients.
The San Francisco-based company “grew too fast and fell short,” Kaushik admitted, but he insisted it did not defraud anyone. Two independent cybersecurity forensic experts hired by Delve to address the accusations, he said, have concluded that “a malicious actor, not a whistleblower or a customer,” purchased a Delve platform and exfiltrated sensitive information in a “coordinated, targeted cyberattack” designed to smear the company’s reputation.
“The data extracted matches the timestamp and the sources shared in the anonymous post,” Kaushik claimed.
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Y Combinator was not swayed by Delve’s defense. On Saturday, the Silicon Valley startup accelerator officially parted ways with Delve. It rescinded the “YC Seal of Approval” and scrubbed the company from its directory, a stunning fall for a 2023 startup that had evolved into the poster child for automated regulatory tech.
“The founders in our community have to trust each other,” YC President and CEO Garry Tan said in a statement, “and we have to trust them. When that trust breaks down, there’s really only one thing to do.”
The controversy came to light last month when an anonymous whistleblower operating under the pseudonym DeepDelver published a series of reports on Substack alleging Delve was “faking compliance.”
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