Why High Alpha Invested in Encamp

by Seth Corder - Senior Associate

Environmental, Health, and Safety (EHS) compliance probably isn’t a topic you’ve spent much time thinking about, but it’s increasingly at the forefront of companies’ minds. 

EHS compliance is not a voluntary program motivated by incentives. It’s a legal mandate, enforced through civil and criminal penalties, and all businesses — from small to large and across industries — are responsible for ensuring their compliance with these regulations at all times. 

The costs of falling out of compliance? Significant. 

Noncompliant companies can expect civil and criminal penalties, reputational damage, or fines that can quickly escalate to six figures. While the cost of complying may seem burdensome and costly, it pales in comparison to the damage of violations. 

When it comes to governance, risk, and compliance management, companies have historically deployed one of two strategies: build internal capabilities or outsource to consultants. In either event, processes are at best automated via bespoke, expensive software, or are more likely optimized through Excel spreadsheets and paper workflows that leave businesses in danger of unintentional non-compliance. 

Companies facing environmental, health, and safety regulations are aware of this risk and are actively seeking solutions. Typically, the technology, integrations, and training involved in compliance maturation follow an arc from unsophisticated and incoherent to more advanced and cohesive.

Our research revealed that the existing software solutions that have defined EHS compliance are not suited for more mature applications, which means companies turn to expensive and inefficient EHS consultants. 

There has to be a better way. 

Encamp CEO Luke Jacobs spent years working with Fortune 10 companies to streamline their environmental compliance programs. To streamline the compliance process, Luke wrote software that increased accuracy, ensured environmental compliance, and boosted efficiency by cutting out costly and repetitive tasks. He understood the inefficiencies and gaps in current EHS solutions and knew that companies deserved better.

In 2018, Luke teamed up with Daniel Smedema and Sam Jacobs to launch Encamp. Daniel was previously a software developer at Epic and Sam previously worked in various roles at Zenefits, YHat, Datadog, and others. Together, their team has a perfect combination of the skills required to disrupt an antiquated compliance ecosystem — EHS consulting experience, startup monetization, and regulation-intensive software. 

Encamp was launched to tackle two high-growth environmental business spaces: environmental consulting, and EHS software. The global environmental consulting market is estimated to grow from $29.7 billion in 2016 to $43.8 billion by 2025. The global EHS software market is projected to grow at an 11% compound annual growth rate from $1.03 billion in 2017 to $1.41 billion this year.

At High Alpha, we believe that in spaces with known rules and parameters, software will outperform and underprice human competition. Regulatory compliance, monitoring, and management lend itself well to augmentation and automation via cloud solutions, and we’ve developed our consultant replacement investment thesis as a result.

We tracked Encamp’s progress for more than a year before investing in their 2019 seed round. The team has made tremendous progress since our initial investment. Encamp has become the largest third-party filer of EPCRA Tier II reporting in the country. They work with more than 170 customers, including American Tower Corporation, Nutrien Ag Solutions, and Asmark Institute, tracking over 10,000 compliance dates and managing more than 2,500 facilities across the country. Encamp was also recently named the 2019 Startup of the Year at TechPoint’s Mira Awards and the 2019 Occupational Health & Safety New Product of the Year.

Today, we’re excited to announce that High Alpha has co-led Encamp’s Series A financing with Allos Ventures. We can’t wait to continue our partnership with the Encamp team as they help large organizations drive efficiencies and digitize their manual compliance reporting. We believe Encamp is tackling a massive opportunity as their industry undergoes a digital transformation and moves offline data and processes to the cloud.

I highly encourage any organization struggling with the complexities of EHS compliance to get in touch with Encamp or send me an email. 

If you’re a consultant with an idea for a software company or an entrepreneur developing a solution to take market share from professional services then please reach out. I’d love to chat. I’m available at seth@highlpha.com.