“If Volkswagen had our system, something like Dieselgate never would have happened,” says Neta Meidav, co-founder and CEO of Vault. She’s referring to the German auto giant’s manipulation of emissions data in 2015, which she notes put out massive amounts of carbon dioxide and directly led to 60 deaths – not to mention firings and tens of billions of dollars in losses for the company. One of the takeaways from the scandal, she says, “was that their internal reporting system was lacking. That is, at the time, the organization relied on an anonymous e-mail system that took complainants nowhere.”
The Vault Platform was made to contend with this problem. “Vault is an internal reporting system that uses the tools of behavioral psychology to give workers the confidence to report internally on any violation or serious problem that occurs in the company,” says Meidav. “The range is wide, from issues connected to organizational culture – discrimination, racism, abuse of workers and sexual harassment – to issues related to the law, like corruption, money laundering, bribery and data manipulation. Things that can lead to disaster.”
Meidav co-founded the company in 2018 along with her husband Rotem Hayoun-Meidav, who also serves as chief technology officer, and Tori Reichman, who serves as chief customer officer. It enables users to raise issues within organizations and to report them to the people in charge.
Vault is an easy-to-use app that can be installed by any employee who wants to bring an issue to their company’s attention. They can send either signed or anonymous reports, depending on their preference, and attack evidence like screenshots or offensive WhatsApp messages.
But behind the scenes, the system knows how “to connect the dots, identify patterns, and thereby enable management to take action before it becomes a story in the New York Times, sparks a lawsuit or causes some other disaster with serious consequences,” Meidav says.
Unlike anonymous emails, the app gives employees confirmation that the complaint was received, looked at by an actual person and dealt with. And if the employee so desires, it also opens a chat with the relevant executive in the organization to deal with the issue.
“In a multinational corporation, for instance, we can show management that the product team in Italy has a racism problem, or that there’s a racism problem in a specific team in South Africa,” Meidav says. For the past year, the platform has also supported COVID-related reports – for instance, when workers feel the company isn’t doing enough to protect them or isn’t complying fully with virus regulations.
- The VC fund betting on Israel’s Arabs
- MeToo? Israeli start-up that covered up sexual harassment raised $70m
- Adderall tech? This Israeli start-up is concentrating on ADHD
The assumption behind Vault is that every problem is systemic. Whether it’s embezzlement or sexual harassment, there’s always more than one case. But sometimes a conspiracy of silence keeps these incidents from coming to light.
Consequently, Vault offers employees a feature called Go Together, in which one worker’s report won’t be sent unless another report on the same subject is received. This feature, the company says, is particularly helpful for women and minorities, who are often afraid to report an incident on their own.
“We reduce the time it takes to investigate an incident by 50 to 80 percent,” Meidav adds. “Sometimes, it takes an organization three to six months to tackle the incident, but with the app, it only takes a few days. These months are exactly when the employee becomes frustrated, quits or goes to the media.”
Companies need to encourage reporting on problems, and this sometimes requires giving employees confidence that they’ll remain anonymous. To make sure workers are confident that they won’t be identified through the app, Meidav says, Vault worked with organizational and behavioral psychology experts, including Duke University psychology professor Dan Ariely.
For executives and the board of directors, Vault offers a kind of dashboard showing how many incidents have been reported and how they were handled.
Connecting to Gen Y
As is true for all startups, the journey to the first financing round wasn’t easy. “It’s impossible to ignore the fact that fact that I’m a woman – which is an anomaly in the startup landscape,” Meidav says. “I don’t think there were any venture capitalists who sat through my PowerPoint presentation and thought to themselves at the end, ‘I wish I had something like this, but from a man.’ But there’s still typecasting.” In Israel, she says, it’s men who served in the elite 8200 military intelligence unit. “I don’t fit that typecast.”
In addition, she says, “Vault is a company that seeks to have an impact. One of my goals is to prove that it’s possible to start a substantial, profitable company that also has a positive impact on the world. And there aren’t many companies like that in high tech.”
She notes that companies have already received dozens of complaints through their system, most of which were well-grounded. “For instance, in one case of racism and abusive behavior at the New York and Los Angeles branches of a global high-tech company, our app led to firings. When this happened, our whole team began crying from excitement. This proved to us that it’s a tool that works.
“We have a client from the energy industry that is now investigating reports connected to health and safety on their drilling platforms, and we’ve gotten strong indications from them that we’ve spared it a serious environmental crisis. We also have a client from the pharmaceutical industry, where the sore spot is concern about forged lab results.”
The company held its seed-stage financing round in April 2019, led by Angular Ventures, and raised $4.2 million. One of the other investors was January Ventures, which invests mainly in startups founded by women. In June, the company raised another $8.2 million. This time, there was more demand, and the company had more freedom to choose their investors. The round was led by Gradient Ventures, which is owned by Google and specializes in artificial intelligence. After raising this money, Vault announced that it planned to increase its workforce from 15 employees to 40.
“We have more than 30 customers, and naturally, we started in the high-tech industry,” Meidav says. “We have companies like Airbnb and, in Israel, Lemonade and Minute Media. That makes sense, because these are super-progressive organizations that want to send their employees and shareholders the message that they take the organization’s ethics seriously and protect their workers. Of course this also relates to the issues of personnel and the employer’s branding.
“We’re currently closing with our first customers from the financial industry – global banks. That’s exciting for me for two reasons. First, these are conservative organizations by nature, and second, they deal with inside information, money laundering – a whole set of risks that we’re less familiar with.”
Meidav says Vault’s service costs between $12,000 and $24,000 a year on average, depending on the client’s size.
While the company chooses its investors with care, it is less selective about its clients. “We also sell to energy and tobacco companies,” Meidav says. “These companies aren’t going to vanish from the Earth, but if we can make them become more egalitarian workplaces or prevent crises, we’ll be happy.”
Vault managed to grow during the coronavirus pandemic. “Vault doesn’t become any less relevant in an era of remote work, because it allows better communication within the organization. After all, what’s an open-door policy when there’s no door?”
She isn’t ashamed to admit that the company is taking advantage of the zeitgeist. There have been various initiatives overseas to increase protection for whistleblowers, first and foremost the EU Whistleblowing Directive, which will come into effect in December. This rule requires every employer in the European Union with more than 250 employees to adopt an internal reporting system.
In the United States, the Securities and Exchange Commission awards millions of dollars to people who expose corruption. Major organizations worldwide are gradually adopting environmental, social and governance policies. And of course, it’s impossible not to mention the #MeToo movement.
“The company was founded at around the time the #MeToo movement started gaining steam, and with it, the understanding that there’s a deep crisis of trust in the working world,” Meidav says. “This was also about the same time as the Black Lives Matter movement and the time when workplace activism began. It’s an era when employees view employers as responsible for what happens both inside and outside.
“This is definitely connected to Generation Y, which prefers meaning in the workplace to the job security that was characteristic of their parents’ generation. Young workers want to know for certain that their company is here to do something good for the world, beyond making a profit.”
’The odds were against me’
Vault’s story begins long before its founding. In the early 2000s, Meidav experienced sexual harassment at her public-sector job. She declined to elaborate on her experience, but it was sufficiently upsetting that she moved to London in 2008. There, she studied international relations at Cambridge, and worked for the British government. She took part in Britain’s delegation to the United Nations on the climate accords, an issue she says is close her heart.
“Our job was to deal with international corruption, to find the loopholes through which governments evade their commitments to reduce polluting emissions.” The result of the resulting talks, she says, was the Paris Agreement. “Israel signed that convention, but during the negotiations, it hurt me to see it adopting the position of the developing countries – the ones that think it’s their turn to develop and cause emissions. For our size, we’re already a pretty polluting country, but that isn’t really on our agenda.”
Transitioning to an entrepreneurial career wasn’t easy, Meidav says. Before making the switch, she consulted one person. “I called my mother, who had been one of the first female programmers at IBM and at that time was sick with stage-four cancer. I told her, ‘I have this idea burning in me, and I’m going to quit my safe job in the civil service, put the career I built aside. The odds are against me, because statistics show that most startups fail, and I’m going to see less of my daughters, but I feel that I have to do this.’
“My mother was quiet for a minute, and then she said, ‘Statistics are for people who make excuses. I didn’t raise you for statistics. Get up and do what’s burning in you – and I’ll be behind you with everything I have in me.’”
Vault was founded in London and run from there. But when the coronavirus hit in early 2020, Meidav and her husband decided to return to Israel after 13 years. “We discovered that society was managing to deal with the pandemic and work flexibly, completely remotely. We also discovered that the beach is good for a CEO’s mental health,” Meidav says with a smile.