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Accel and Sequoia seed Middesk with $4M to background check businesses

For those of you that diligently follow the hot startups to graduate from Y Combinator’s accelerator program, you might recall Middesk.
The company was amongst an exclusive subset of startups in YC’s winter 2019 batch to walk into demo day term sheet in hand. Top VCs, like Accel and Sequoia Capital, couldn’t wait until the team’s public pitch was complete to seed the company.
Middesk performs background checks, but not of people; rather, the startup helps companies identify business and regulatory risk in their customer base. Today, it’s announcing its first round of capital, a $4 million financing led by Accel’s Rich Wong, with participation from Sequoia. Founded by two early employees of another YC graduate, Checkr, which automates the pre-employment background check process for companies, Middesk chief executive officer Kyle Mack and chief technology officer Kurt Ruppel wanted to apply their learnings to a business identity product.
“What we’ve built from the ground up is a product to help companies understand who their customers are and what those customers do for their business,” Mack explains.
Selling a product in a traditional and heavily regulated industry, Mack says having top-tier, established venture funds Accel and Sequoia on board has made a big difference for the company. This is particularly interesting, given the round comes at a time in which competition for early-stage deals is greater than ever. More and more billion-dollar funds, Accel and Sequoia included, are moving downstream to purchase stakes in promising companies as early as possible, beating out seed funds by providing better terms and brand recognition.

The fight for seed
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