CoComply Raises £1.9M ($2.4M) Funding to Expose Hidden Contractors in UK Supply Chains

CoComply, the UK-based RegTech startup bringing AI-driven visibility to contractor workforces, has raised £1.9 million ($2.4 million) in seed funding led by Mercia Ventures and Haatch, with participation from SFC Capital, Haatch’s Founder Fund, and several angel investors. The round brings CoComply’s total disclosed funding to approximately £2.5 million ($3.2 million) following a pre-seed round in 2024.

The funding comes as CoComply prepares to scale its platform, which helps companies identify and manage hidden contractors across their supply chains, meeting compliance requirements under UK tax and employment law. The company did not disclose its valuation.

CoComply Funding Overview By CREDX Media

Startup Name	CoComply
Founders	Michael Cleavely (CEO)
Founded	2023
HQ	UK
Round	Seed Funding
Amount Raised	£1.9M ($2.4M)
Valuation	Not disclosed
Category	RegTech, Contractor Compliance, Supply Chain Risk
Lead Investors	Mercia Ventures, Haatch
Key Investors	SFC Capital, Haatch Founder Fund, angels
Total Funding Raised	~£2.5M ($3.2M)
Target Market	UK enterprise and mid-market companies
Regulatory Focus	IR35, Off-Payroll Working Rules, Supply Chain Compliance

💡 Use of Funds

• Platform Development: Expanding AI capabilities to identify contractor risk across deeper supply chains.
• Go-to-Market Expansion: Growing sales and marketing to reach more UK enterprises.
• Team Growth: Hiring across engineering, product, and customer success.

Startup Overview: CoComply

What CoComply Is Building in Simple Words

CoComply has built an AI platform that helps companies understand who is actually working in their supply chains—and whether those contractors are compliant with UK tax and employment rules.

The problem is fundamentally about visibility. Most large companies know their direct suppliers. But beneath those suppliers may be layers of subcontractors, freelancers, and agency workers—many of whom are “hidden” from the end client’s view. Under the UK’s Off-Payroll Working Rules (IR35), the end client can be liable for tax and National Insurance if contractors are incorrectly classified as self-employed.

CoComply’s platform:

• Maps Contractor Networks: Uses AI to identify contractors working across supply chains, including those multiple layers deep.
• Assesses Compliance Risk: Flags contractors who may be at risk of non-compliance with IR35 and other UK regulations.
• Automates Due Diligence: Reduces manual effort required to gather and verify compliance documentation.
• Provides Audit-Ready Reports: Generates evidence trails for HMRC audits and internal compliance reviews.

Why CoComply Matters

1. IR35 Compliance Is a Costly and Complex Problem The UK’s IR35 rules are notoriously complex. HMRC has increased enforcement activity in recent years, and companies found non-compliant face significant tax liabilities, penalties, and reputational damage.
2. Supply Chains Are Opaque Large enterprises often have hundreds or thousands of suppliers, each with their own subcontractor networks. Traditional compliance tools focus only on direct contractors, leaving companies exposed to hidden risk several layers deep.
3. AI Can See What Humans Miss CoComply’s platform automates the data collection and analysis required to map contractor networks and assess compliance risk. What would take compliance teams weeks of manual work can be done in hours.
4. Regulatory Pressure Is Increasing As HMRC ramps up enforcement and the UK government considers further reforms to contractor rules, demand for compliance technology is growing.

Founder Background: The Team Behind CoComply

Michael Cleavely (CEO) founded CoComply in 2023. Their background spans compliance, operations, and technology—a combination that informed the platform’s design around the actual workflows of compliance teams.

The founding insight came from watching companies struggle to understand who was actually working in their supply chains. IR35 compliance had become a board-level concern, but the tools available were manual, fragmented, and unable to see beyond direct suppliers. CoComply was built to solve that problem with AI.

The RegTech Compliance Race Nobody Expected

CoComply operates in a market where compliance technology is becoming increasingly important.

Traditional compliance tools including IR35 Shield and Qdos focus on individual contractor assessments. They provide status determination services but don’t map entire supply chains.

Enterprise compliance platforms including ComplyAdvantage and Refinitiv (now part of LSEG) focus on financial crime and regulatory compliance across multiple domains, but not specifically on contractor classification.

CoComply’s differentiation is its supply chain focus. Rather than assessing individual contractors in isolation, it maps the entire network of contractors working for a company—including those at suppliers and subcontractors—and identifies compliance risk across the chain.

The competitive moat, if it materializes, is data network effects. The more companies that use CoComply, the more visibility it has into contractor networks across the UK. This creates a map of contractor relationships that is difficult for competitors to replicate.

Founder Intelligence: What Founders Can Learn from CoComply

• Solve the compliance problem that keeps boards awake: IR35 compliance is a board-level concern for UK companies. CoComply focused on a problem with clear financial and reputational consequences.
• See what others miss: Traditional tools focus on direct contractors. CoComply maps the hidden layers—subcontractors and agency workers—that create the most risk.
• Use AI to automate the tedious work: Compliance teams spend hours gathering and verifying documents. CoComply’s AI automates that work, freeing teams to focus on decisions.
• Target regulated industries first: Companies in construction, financial services, and healthcare face the highest compliance burden. They are the earliest adopters of compliance technology.

Investor Intelligence: Why This Round Gets Premium Capital

Mercia Ventures led the round. The firm is one of the UK’s most active regional venture capital investors, with deep experience in RegTech and B2B software. Mercia’s backing signals conviction in CoComply’s approach to a complex regulatory problem.

Haatch co-led the round, bringing early-stage expertise and a track record of backing UK B2B software companies. SFC Capital, a specialist early-stage investor, also participated.

The investor composition signals conviction across multiple dimensions: Mercia’s regional network and RegTech expertise, Haatch’s early-stage company-building experience, and SFC Capital’s focus on seed-stage UK startups.

The Road Ahead for CoComply

Expansion Targets

With £1.9 million in capital, CoComply will:

• Expand AI capabilities to identify contractor risk across deeper supply chains.
• Grow sales and marketing to reach more UK enterprises.
• Hire across engineering, product, and customer success.

Competitive Response

Expect:

• Traditional compliance tools to add supply chain mapping features.
• Larger RegTech platforms to acquire or build contractor compliance capabilities.
• New startups to emerge targeting specific industries or regulatory regimes.
• CoComply’s moat: supply chain focus + AI-powered mapping + data network effects.

Conclusion

CoComply’s £1.9 million seed funding validates the thesis that supply chain contractor compliance is a critical, underserved problem. The company’s AI platform maps hidden contractor networks and assesses IR35 risk across the chain—a capability traditional tools don’t offer.

Market tailwinds favor CoComply: increasing HMRC enforcement, complex IR35 rules, and growing demand for compliance technology. The company’s supply chain focus and AI-powered approach position it to capture this opportunity as companies seek to de-risk their contractor workforces.

For deep analysis of RegTech funding, compliance innovation, and companies reshaping supply chain risk, explore CREDX Media for comprehensive coverage of startup funding trends, valuation intelligence, and founder playbooks.

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Frequently Asked Questions

1. What is CoComply’s total funding and latest round size?
CoComply has raised approximately £2.5 million ($3.2 million) total. Its £1.9 million ($2.4 million) seed round was led by Mercia Ventures and Haatch in October 2026.

2. How much did CoComply raise in its seed round and who led the investment?
CoComply raised £1.9 million ($2.4 million) led by Mercia Ventures and Haatch, with participation from SFC Capital, Haatch’s Founder Fund, and angel investors.

3. What is the valuation of CoComply?
CoComply did not disclose its post-money valuation.

4. Who are the major investors in CoComply?
Major investors include Mercia Ventures (lead), Haatch (co-lead), SFC Capital, Haatch Founder Fund, and angel investors.

5. Who are CoComply’s founders?
CoComply was founded in 2023 by Michael Cleavely (CEO).

6. What is CoComply’s business model?
CoComply operates a B2B SaaS model, selling its AI-driven compliance platform to UK enterprises and mid-market companies on a subscription basis.

7. How does CoComply’s platform work?
CoComply uses AI to map contractor networks across supply chains, identify compliance risks under IR35 and other UK regulations, automate due diligence, and generate audit-ready reports.

8. What traction justifies CoComply’s seed funding?
CoComply has not publicly disclosed customer numbers. The round was backed by Mercia Ventures and Haatch, two established UK investors with RegTech and B2B software expertise.

9. What are CoComply’s plans for the £1.9 million seed capital?
CoComply will expand AI capabilities to identify contractor risk across deeper supply chains, grow sales and marketing, and hire across engineering, product, and customer success.

10. What problem does CoComply solve for UK companies?
CoComply addresses the challenge of identifying hidden contractors in supply chains and ensuring compliance with IR35 and other UK tax and employment rules, reducing the risk of tax liabilities and penalties.

11. Who is the CEO of CoComply?
Michael Cleavely serves as CEO and co-founder, bringing experience spanning compliance, operations, and technology.