CoComply, a RegTech startup based at Alderley Park in Cheshire, has raised £1.9 million to help large employers find the contractors hidden inside their supplier contracts. The round was led by Mercia Equity Finance, part of the Northern Powerhouse Investment Fund II, with venture capital firm Haatch.
Three experienced operators also invested: Richard Law, former chief executive of identity verification group GBG; Seb Timpson, co-founder of With Intelligence, which S&P Global bought for $1.8 billion; and Stephen Cann, chief executive of Bollin Group. CoComply's management also put money in, Tech Funding News reported.
The company says it will use the money to build out its product, grow its sales, marketing and delivery teams, and expand in the UK and abroad.
What does CoComply do?
It finds the people who work for a company without appearing on its payroll. Many large organisations bring in workers through statements of work, outsourcing deals and service contracts, so nobody has a complete list of who is actually doing the work.
CoComply's platform reads that supplier data, picks out the individual workers inside it, and works out how each one is engaged. It then flags which checks apply, covering IR35, Right to Work and modern slavery rules.
The company describes the product as AI-native, but it pairs the software with specialist experts who make the final classification calls.
"Our mission is to provide the decision and governance layer across these teams," said founder and chief executive Michael Cleavely, referring to the business functions that share responsibility for external workers.
Why is hidden contractor risk a problem for UK businesses?
Because the legal responsibility has moved to the client. Since April 2021, medium and large private-sector businesses have had to decide whether each contractor they use should be taxed like an employee under the IR35 off-payroll rules.
HMRC estimated in February 2025 that about 120,000 workers were likely to be affected by those reforms. A Treasury answer in June 2026 put the extra tax, National Insurance and Apprenticeship Levy they raised at about £4.2 billion by the end of March 2023.
The rules keep widening. From 1 October 2026, Right to Work checks were extended to cover individual subcontractors and some people engaged through online matching services, according to Tech Funding News.
"Organisations increasingly rely on outsourcing, yet many lack a clear understanding of who is delivering the work," said Maurice Disasi of Mercia Ventures. "What stood out to us was the scale of the problem and how poorly it is currently addressed."
Who is behind CoComply?
Michael Cleavely is a second-time founder from the recruitment world. He previously co-founded workforce consultancy Triple Seven, in which Experis, part of ManpowerGroup, took a majority stake.
The idea for CoComply came after the 2021 IR35 reforms. Cleavely was running an IT consultancy when a large enterprise client asked for help understanding its contractor population, which meant working manually through thousands of lines of supplier data.
The company was incorporated in 2019 and won an Innovate UK Smart Grant in 2024. Its leadership team includes chief technology officer Phillip Clarence.
How fast is CoComply growing?
Quickly, by its own figures. CoComply says revenue grew 240% in 2025 and is forecast to grow by more than 120% in 2026, while customer numbers grew 300% year on year.
Its customers range from mid-market firms to FTSE 100 companies. Named clients include Aston Martin, games publisher Take-Two, RS Group, fintech Thredd, Quint Group, Dementia UK and the Royal Yachting Association.
The company does not disclose its revenue, so the growth rates cannot be compared with a cash figure.
"We're delighted to be backing Michael and the team as they scale the business in the UK and internationally," said Marwa Ebrahim, associate at Haatch.
What does this round mean for UK founders?
It is another sign that regional public funds are doing much of the early backing outside London. The Northern Powerhouse Investment Fund II is a £660 million fund covering the whole of the North of England, offering loans from £25,000 to £2 million and equity of up to £5 million.
Bizztor's analysis of UK startup funding in 2026 found public and regional investors in 29% of rounds outside London, against 7.5% in the capital. Mercia Ventures was among the most frequent backers outside London, with 10 rounds this year before this one.
That support keeps growing. The British Business Bank, which sits behind the Northern Powerhouse fund, has also committed £180 million to six AI and deep tech funds.
CoComply also shows how rule changes create markets. Larger players such as Deel sell contractor management tools, but Tech Funding News noted that neither Deel nor US compliance startup Delve appears to focus on workers buried inside supplier contracts.
For founders building in compliance, that is the pattern to watch. When a regulation moves responsibility onto businesses, the company that turns the manual clean-up into software has a ready-made buyer.
Bizztor covers UK startup funding every week. Follow Bizztor on LinkedIn for the latest rounds.
