LinkedIn, a social network for professionals, has been successful at getting people to share their professional and educational history. But a challenge for the network is that there is no system in place to ensure that the information is accurate, said Eric Ly, one of LinkedIn’s cofounders.
- LinkedIn has 810 million users, yet a study found that 34% of the information on its site was fake.
- Eric Ly, a cofounder of KarmaCheck, wants to solve this with faster background checks.
- It raised $15 million in its Series A, led by Velvet Sea Ventures, and is now valued at $90 million.
In fact, 34% of LinkedIn users said they lied about the information on their profiles, a LendEdu survey found.
Ly, a cofounder of the background-check software startup KarmaCheck, wants to solve this problem by speeding up the process of checking people’s work and school history, especially on networks such as LinkedIn. Previously, background checks “have been a very manual process,” Ly said. Employers verify degrees by calling educational institutes, and they also need to sift through government databases for criminal records, which can make the process of verifying personal information slow.
KarmaCheck simplifies this process by being a “one-stop shop,” Ly said. Companies can integrate its software into their human-resources systems to consolidate thousands of federal, state, and county data sets into one system. It uses “a candidate-centric model,” he said — meaning a candidate’s information that doesn’t need to be rechecked, such as education and employment history, is stored on KarmaCheck’s database. Ly said this could save companies time and money, as traditionally it would be checked every time.
Ly mentioned the risk of lying about work experience even at the highest levels of the corporate world. Some high-profile cases have come out over the years, including that of Scott Thompson, a former Yahoo CEO whose résumé listed a computer-science degree. But Thompson graduated with an accounting degree. Then there was David Tovar, a Walmart spokesperson who said he had a bachelor’s degree from the University of Delaware. His two-decade-old lie was caught after a background check for a promotion. KarmaCheck announced last week that it raised $15 million in its Series A round, led by Velvet Sea Ventures, which brought its valuation to $90 million. This came after it raised $4 million in February, completing its seed round.
The company’s software is being used by more than 100 customers, including food companies such as McDonald’s and Domino’s; Clover and Lume in the healthcare industry; and staffing marketplaces such as Recruiter.com.
While KarmaCheck has been around since 2018, it intends to use the funding to create awareness of its brand by reaching out to enterprise companies and small businesses. In the future, KarmaCheck hopes to integrate blue-check icons, similar to those on Twitter, on LinkedIn profiles to show that its information has been verified.
KarmaCheck’s top competitors in background checks are Paycom, RUN by ADP, and VICTIG Screening Solutions.
Read the 16-slide pitch deck that KarmaCheck used to raise $15 million.