Minneapolis software firm raises $50M to expand compliance platform

Inspectorio — whose software helps consumer-goods companies and retailers manage risk by keeping track of their suppliers' compliance — raised another $50 million to expand its suite of products.

The investment is a Series B funding round that was led by New York private-equity firm Insight Partners. Other investors participating in the round include firms Techstars, Flexport, St. Paul-based Ecolab and Matchstick Ventures, which is operated from Minneapolis and Boulder, Colo.

Software made by Minneapolis-based Inspectorio — which relocated its headquarters from Hong Kong to Minneapolis in 2016 after participating in the Target Techstars accelerator program — can send automated reports with real-time data on how facilities are complying with environmental, social and technical standards.

The company also helps companies be more transparent with consumers who want to know which raw materials are being used, how waste is being handled at facilities, and what are that company's social and labor best practices.

Adoption of Inspectorio's technology accelerated during the pandemic, with companies "rethinking their approach to supplier management and vendor collaboration," said Carlos Moncayo, CEO and co-founder of Inspectorio.

"Once they took the step to digitize their relationships with suppliers and replace obsolete third-party inspections for software that guides and supports their supplier partners, they realized how much they were losing by delaying this transition," he said. "Now, two years after the pandemic first hit supply chains, the entire industry recognizes the benefits of software-based supplier performance management, and we are entering a stage of mass-market adoption."

Inspectorio has more than 7,000 customers, including Target Corp., which is also one of its investors.

Leadership at Inspectorio will apply some of the capital toward expanding its laboratory testing management technology and raw materials inspections; its traceability and carbon tracking technology, and on the production tracking front, expand technology for factory shop floor control and connectivity to smart machines, Moncayo said.

Since being founded in 2016, Inspectorio's founders have raised $63 million to grow the business and now employs more than 200 people in the U.S., Ecuador, China, Vietnam and Belarus. In addition to applying the fresh capital to research and development, the company will also add around 100 new employees this year, Moncayo said.

Two years ago, the company transitioned to operating remotely, allowing employees to work from anywhere. The company will, however, continue to recruit employees from the Twin Cities, "based on the outstanding talent available here," Moncayo said.

Last summer, Inspectorio was selected for Apple's Impact Accelerator, which is designed to help grow companies owned by people of color that are focused on environmental solutions. Only 15 companies nationwide were chosen.