Robert Ambrogi Blog
Last March, I wrote here about SingleFile, a company whose mission is to help businesses navigate complex regulatory environments effortlessly by automating outdated filing processes and leveraging AI technology in a unified cloud platform.
Today, it took a major step in driving that mission forward with news that it has raised $9 million in Series A funding, bringing its total funding to $24 million since its founding in 2019, including $15 million raised in the past 12 months.
The round was led by VC firm Foundry Group, which participation from existing investors including Pioneer Square Labs and The LegalTech Fund, as well as law firms Wilson Sonsini, Cooley, DLA Piper, Fenwick & West, Perkins Coie, and individual lawyers from the firm K&L Gates.
“This new round of funding marks a significant milestone for SingleFile as we continue to revolutionize the way businesses and their trusted advisers handle ever-increasing and repetitive compliance burdens,” said Aaron Finn, SingleFile’s CEO.
The Seattle-based company company will use the funding primarily to expand its technology platform and scale operations, with a particular focus on research and development to bring additional compliance capabilities to its platform, Finn said.
The company has also expanded its executive team, adding Mindy Lauck as chief product officer and Teresa Kotwis as chief financial officer. Lauck has been a CEO and product leader at multiple companies, while Kotwis likewise has been CFO at a number of startups and established companies.
Digital Compliance Platform
The company, which spun out of Pioneer Square Labs’ Seattle incubator in 2019, serves law firms, corporations and investor firms with a digital platform for filing and tracking annual reports and other state-required filings. It also offers entity management and resident agent services.
Last year, in anticipation of the beneficial ownership filing requirements under the Corporate Transparency Act taking effect, the company launched a module specifically for CTA reporting. The CTA requirement helped the company’s business pipeline “blow up,” Finn told me last March.
Despite current uncertainty around CTA implementation due to various legal challenges, Finn said the company continues to see substantial growth, particularly in relation to CTA compliance. In fact, it experienced its most significant growth since inception during November and December, with usage by law firms increasing more than threefold compared to the previous year.
“Even with the CTA uncertainty that happened during that time, it was still quite a lot of growth for us and quite a lot of customers wanting to get filed before that original deadline and some just wanting to get ready to file,” Finn said in an interview.
He said the company continues to gain significant traction in the legal market, and now serves more than 60 law firms, including 33 Am Law 200 firms, and more than 4,000 customers overall.
One System of Record
But as much as the CTA has been a boon to SingleFile’s business, Finn emphasizes that it is not its only business or even the majority of its business.
“We believe that all of your information, all of your legal entity information, needs to be maintained in one system of record so that when information changes, it can update any compliance filings that are required,” he said.
The company positions itself as bringing modern technology to what has traditionally been a manual, paper-intensive industry.
“The whole thesis of our company is that modern technology can help take the manual paperwork burden out of this industry,” Finn said. “We’re seeing it really blossom with CTA, combined with filing and registered agent services.”
Customers particularly benefit from the SingleFile’s cloud-native platform, Finn believes.
“Because we’re using cloud-based technology, it allows any of the constituents that are involved in these compliance filings to be able to participate, while the company maintains the data in one place and has that system of record.”
‘A Generational Business’
Jaclyn Freeman Hester, partner at Foundry Group, cited the company’s “sticky product” and strategic distribution model as factors in the decision to lead the round. “SingleFile has the makings of a generational business — a sticky product that’s delivering exceptional value to customers, a strategic distribution model, and best-in-class SaaS metrics,” she said.
The company plans to use the new funding to expand beyond its current offerings into additional compliance areas. Finn indicated that customers have requested capabilities for blue sky filings, SEC filings, and business licensing, among other compliance requirements that are typically handled manually or through consultants.
“We just want to keep bringing more and more of this compliance work into our automation and into our intelligent network.”
While law firms are a primary channel for SingleFile’s services, the company’s business model typically involves building direct relationships with the law firms’ clients. The exception is in private wealth or private client groups at law firms, where the firms themselves become the direct clients.
‘Jurisdictional Intelligence’
SingleFile competes with traditional players in the registered agent and legal filing industry such as CT Corporation, owned by Wolters Kluwer, and CSC Global. The company differentiates itself through what Finn describes as its “jurisdictional intelligence” — a cloud-native infrastructure that helps legal entities registered across multiple jurisdictions understand and maintain their compliance requirements.
“Think about all the government agencies that have all these requirements that businesses need to follow,” Finn said. “… How do we go and take all this jurisdictional intelligence and bring it into one system that’s smart enough to understand and compare and make sure that any legal entity that might be registered in multiple jurisdictions across the globe knows what compliance requirements they have to follow to maintain good standing.”
Looking ahead, Finn sees opportunities to expand the platform’s capabilities to address the broader landscape of corporate compliance requirements.
He said the federal Office of Management and Budget has estimated that compliance with federal code paperwork requirements alone creates over 10 billion hours of burden annually on the U.S. economy, with a significant portion falling on businesses — and that figure does not include all the state codes a business has to follow.
“You’re talking tens of billions of hours of non-tax compliance work that has to be done just in the U.S. alone for hundreds of millions — 40 million to 100 million — legal entities,” Finn said. “You’re talking about a lot of paperwork burden for a lot of people.”