What's Happening?
Yardstik, a Minneapolis-based workforce screening company, has successfully raised $30 million in a Series B funding round, led by Harbert Growth Partners. This investment brings the company's total capital raised to $65 million. The new funds will be allocated
towards advancing Yardstik's fraud prevention and monitoring technology, including motor vehicle reports, OIG exclusion monitoring, and automated alerts for expiring worker licenses, insurance, or certifications. The company argues that traditional background checks are a 'single moment in time' solution, while workforce risk is dynamic. To address this, Yardstik has made two features standard for all customers: Fraud Insights, which provides a live view of aggregate fraud risk signals, and Continuous Monitoring, which automatically enrolls screened workers in post-hire monitoring to reduce manual rechecks. This move aims to extend identity fraud checks beyond the initial hiring phase, offering ongoing vigilance against fraudulent activities.
Why It's Important?
This funding round for Yardstik is significant for U.S. businesses, particularly those in the gig economy, staffing, healthcare, transportation, logistics, and childcare sectors. The traditional background check model, which focuses on a single point in time, leaves companies vulnerable to fraud that can emerge post-hire. Yardstik's enhanced continuous monitoring and fraud insights directly address this gap, potentially saving U.S. companies substantial financial losses from occupational fraud, which can run undetected for months. By proactively identifying fake identities and credentials, businesses can mitigate risks associated with employee misconduct, credential misrepresentation, and compliance failures. This development also reflects a broader industry trend towards more dynamic and real-time identity verification solutions, which is crucial for maintaining trust and security in an increasingly remote and flexible workforce environment. Companies like Gopuff, Liveops, and Task Rabbit, already Yardstik customers, stand to benefit from these expanded capabilities.
What's Next?
With the new capital, Yardstik is expected to accelerate the development and deployment of its fraud prevention and monitoring technologies. This will likely lead to more sophisticated tools for continuous identity verification and risk assessment for U.S. workforces. The company's focus on integrating with applicant tracking and HR systems suggests a future where real-time fraud detection becomes a standard component of the hiring and employment lifecycle. Other companies in the identity verification space may follow suit, intensifying competition and innovation in continuous monitoring solutions. This could also prompt regulatory bodies to consider updated guidelines for workforce screening, moving beyond one-time checks to incorporate ongoing verification, especially in sensitive industries. The increased adoption of such technologies will likely lead to a more secure and trustworthy workforce across various U.S. industries.
Beyond the Headlines
Yardstik's expansion into continuous monitoring highlights a deeper societal shift in how trust and identity are managed in the digital age. The rise of deepfake technology and sophisticated identity fraud schemes necessitates a move beyond static verification methods. This development has ethical implications regarding employee privacy and data security, as continuous monitoring involves ongoing collection and analysis of personal information. Balancing robust fraud prevention with individual rights will be a critical challenge. Furthermore, the emphasis on post-hire monitoring suggests a growing recognition that employee risk is not static but evolves over time, influenced by various factors. This could lead to a re-evaluation of employment contracts and policies, incorporating clauses related to ongoing background checks and digital identity verification. The long-term impact could be a more secure, albeit more scrutinized, workforce environment, where digital trust is continuously earned and verified.
