Who is Certo, the start-up backed by Motier Ventures?

Just nine months in, and already a $4 million funding round. On LinkedIn, the young start-up Certo announced that it had closed a substantial initial funding round to support its AI-powered compliance operating system for the FMCG industry.

Led by venture capital firm Daphni, the round also saw participation from the Entrepreneurs First incubator, family holding company Motier Ventures, owners of the Galeries Lafayette group, and Transpose Platform. They were joined by two business angels, including Christophe de Villeplée, formerly in charge of IFF’s fragrance division. But how did Certo capture the attention of these investors and consumer goods heavyweights?

An accelerated process?

Founded nine months ago within the Entrepreneurs First incubator, the company is already supporting several clients. Among them, Certo counts only companies generating over one billion euros in revenue. This signals how acutely groups, particularly in the luxury sector, recognise compliance imperatives, as well as their urgent need for appropriate solutions. The start-up’s concept is simple: to do away with “spreadsheets, scattered PDFs and compartmentalised document management systems”, at a time when compliance standards are proliferating worldwide.

At the helm are Bastien Deliège-Coste, a former strategy consultant at Roland Berger, notably in cosmetics, and Jean Duquenne, a former machine learning engineer involved in the launch of medical devices in the United States. Drawing on their respective experience, they aim to address the need for better data management to speed up the approval of consumer products across multiple countries and economic areas worldwide.

Prevention rather than cure

Certo is built around two main services. The first is technological and draws on the regulatory databases of countries and economic areas, helping clients determine which formulations can and cannot be marketed. Within this first pillar, Certo also factors in company-specific standards that enable them to maintain precise specifications.

“They’ll have their own list of banned ingredients in-house, or industry standards they want to follow, in addition to the regulatory ones. And also restricted lists or specifications from their distributors,” explained Deliège-Coste, citing Sephora as an example.

Certo also strives to work proactively. As its co-founder notes, the teams monitor analyses of certain ingredients published by a scientific committee under the auspices of the European Union. Also CEO of the start-up, Deliège-Coste added: “We can anticipate future regulation on an ingredient by ingesting the regulatory text. And we keep this up to date so we can trigger alerts across our clients’ product portfolios.”

A solution supported by artificial intelligence

The company’s second pillar consists of providing AI workflows developed “with product compliance teams”, which accelerate the validation of compliance for specific elements, such as all the raw materials making up a specific product in a given country.

“We also check marketing claims, which are a key battleground, particularly in cosmetics. We check the results of the tests [carried out by the company, editor’s note], what the regulations allow and the characteristics of the product to verify the claim.

We also check the labelling and packaging. Then we generate the documents needed to enter the market, often declarations, which we call ‘product information files’,” explained Certo’s co-founder.

For the time being, the start-up bases its services on information provided by companies which, according to Deliège-Coste, can, for example, place products on European markets without having to undergo automatic checks, simply by registering them on an online portal. However, post-market inspections are possible, and compliance standards are particularly stringent. This is why, in its second phase of development, Certo aims to test clients’ products directly and certify their compliance in-house. Hence the fundraising.

Objective: issue “in-house” certifications

“We are in the process of raising funds. We chose a European fund rather than an American one. And we chose to operate from Paris rather than from the United States, because that’s where we had the most traction, even though today we serve clients in the United States and Europe,” stressed Deliège-Coste.

The $4 million financing will enable the company “to develop [its] in-house engineering and regulatory teams, extend [its] multi-market coverage thanks to [its] proprietary databases, and increase [its] commercial activities” in the two aforementioned regions, where the company says it intends to recruit in engineering, regulatory and commercial roles.

Certo ultimately aims to certify its customers’ products directly. Initially, the start-up will help its clients obtain established certifications such as B Corp, COSMOS and Ecocert.

“The second step, however, is to create our own trust standard, our own certification. By checking hundreds of thousands of raw materials and hundreds of thousands of products, we’ll be confident about what makes a good product at any given time for the consumer,” stressed its co-founder.

A potential opening to other product categories

Already used by the beauty departments of some luxury players, Certo has reportedly been introduced to their ready-to-wear and home departments.

While the expansion of its client portfolio has not yet extended to these divisions, Certo is already working with companies offering home products, food supplements for people and for animals, and “functional” foods (particularly nutritious).

In addition to the potential expansion of the solution to other product categories, geographic expansion is also on the cards. The start-up’s founders know that part of its future lies in Asia, particularly in cosmetics. “We’ll be delivering to 50 countries [worldwide] by the end of the year, and we’re going to keep growing,” explained Deliège-Coste, adding that certain regions enable a large number of countries to be managed under common standards, such as ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, East Timor, Thailand and Vietnam). This does not preclude deeper, country-by-country work for certain product categories.

A highly competitive service

Other countries, such as the United States and the Gulf States, illustrate the challenges that can arise in the field of compliance standards. In cosmetics, for example, the US federal government is gradually taking up public health issues and realising that its framework has long been too “loose”. The Modernization of Cosmetics Regulation Act (MoCRA) was adopted in 2022. At the same time, states are stepping up and adding their own texts, further complicating the task of tracking regulations.

Even today, in certain segments, the US federal government and others rely on private players such as Bureau Veritas (USA), SGS (Switzerland) and InterTech (France) to provide a compliance framework across different product segments. This competition is complemented by PLM (Product Lifecycle Management) software with compliance modules, such as SoftExpert Suite, Oracle Fusion Cloud PLM, ClickUp, among others.

Speed is, therefore, of the essence when it comes to establishing a foothold in the certification sector. Asked about a potential second round of financing, Deliège-Coste indicates that Certo would only need one if it were to open new product verticals, such as food, fashion and household appliances. Conversely, a second raise would not be on the agenda in the event of significant growth in markets already covered, “which is rather the trend today.” To be continued.