Yardstik Raises $30M for Continuous Workforce Vetting

Yardstik, a pioneer in continuous workforce monitoring, has successfully closed a $30 million Series B funding round, signaling a significant shift in how businesses manage employee risk. The investment, spearheaded by Harbert Growth Partners, brings the company's total funding to $65 million. This capital infusion is earmarked to enhance its platform's capabilities in areas such as motor vehicle record checks, Office of Inspector General (OIG) exclusion monitoring, and automated alerts for expiring credentials.

The traditional approach to background checks has long been a static, one-time event, typically completed before a candidate joins an organization. However, this leaves a critical vulnerability, as employee credentials, licenses, and driving records can change or lapse post-hire, creating ongoing risks. Yardstik addresses this gap with its "Human Trust Platform," which integrates pre-hire screening with ongoing monitoring, effectively transforming the static snapshot into a dynamic, real-time view of workforce integrity. This continuous oversight is crucial, especially given that occupational fraud, according to the Association of Certified Fraud Examiners, often goes undetected for nearly a year, with a significant portion discovered through tips rather than internal systems.

Andrew Johnson, CEO of Yardstik, emphasizes the inadequacy of legacy systems. \"The legacy industry was built around a single moment in time,\" he stated, contrasting it with the daily evolution of workforce risk. Yardstik's innovative model makes features like real-time credential visibility and post-hire monitoring standard offerings, rather than costly add-ons. The company's core thesis is that employers should be immediately aware of critical changes, such as a lapsed license, on the day it occurs, not weeks or months later. This proactive stance is likened to the difference between a static photograph and a live video feed.

Demonstrating robust market traction, Yardstik reported an impressive 149% year-over-year revenue growth and a remarkable 98% customer retention rate over the past three years. The company, founded in Minneapolis in 2020, serves a diverse clientele across gig marketplaces, staffing, healthcare, transportation, logistics, and childcare sectors, including prominent names like Gopuff, TaskRabbit, Liveops, and H&R Block. This sustained customer loyalty, particularly in the value derived from post-hire protection, was a key factor in Harbert Growth Partners' decision to lead the funding round, according to Brian Carney, general partner at the firm.

Yardstik's strategic positioning in the crowded background check market, which is valued at approximately $5.1 billion in the US, is noteworthy. Instead of directly competing with giants like Checkr on per-check pricing or extensive global coverage, Yardstik focuses on disrupting the fundamental premise of one-time screening. By embedding its continuous monitoring and fraud detection capabilities directly into major applicant tracking systems (ATS) like Greenhouse, Lever, and Bullhorn, and offering white-label solutions via API, the company effectively integrates its services within the operational workflows of its clients. This approach allows platforms to offer enhanced security and compliance without the need for direct brand competition, a strategy that bypasses established incumbents such as Sterling, HireRight, and First Advantage.

The broader market for identity verification and workforce screening is rapidly evolving, with AI advancements making fraudulent credentials easier to create. Companies like Persona, Socure, and Tofu are also innovating in related spaces. Yardstik's focus on continuous, automated monitoring as a standard feature, rather than a premium service, differentiates it significantly. While this model may impact short-term margins, the exceptional growth and retention figures suggest a strong market appetite for its comprehensive approach to mitigating ongoing workforce risks.