Shujinko raises $7.5M to help companies comply with regulations as they shift to the cloud – GeekWire

Shujinko raises $7.5M to help companies comply with regulations as they shift to the cloud – GeekWire

Shujinko raises $7.5M to help companies comply with regulations as they shift to the cloud – GeekWire

Shujinko co-founders Scott Schwan and Matt Wells. (Shujinko Photo)

About three years ago, Matt Wells and Scott Schwan had a huge task ahead of them. They were charged with bringing coffee giant Starbucks into the public cloud for the first time.

With a big budget, they figured they could buy a solution. But, as it turned out they couldn’t; there wasn’t a solution that worked for the job. To build out a cloud setup that complied with regulations and best practices, Wells and Schwan had to hire 20 engineers and invest a total of more than 30,000 hours of work.

It was this experience that convinced the long-time partners to branch out and start their own company. Shujinko, which spun out of Pioneer Square Labs late last year just raised $7.5 million to make sure other companies don’t have to experience the same headaches Wells and Schwan did at Starbucks.

“What we saw there was a massive challenge,” Wells said of his time at Starbucks. “With Shujinko, what we are trying to do is automate that, taking it from 30,000 man hours in a year to weeks to get your IT audit in place.”

Unusual Ventures led the Series A round with participation from Defy. Shujinko makes cloud compliance software and helps companies automate IT audits — extensive examinations of management and technical controls and IT infrastructure to make sure the organization is compliant with security best practices and regulations.

Shujinko has now raised a total of $10.3 million in its lifetime. Today it has approximately 15 employees, with plans to grow to more than 30 people over the next 12 months.

The Shujinko team. (Shujinko Photo)

Companies are increasingly adopting cloud services and moving workloads from their own data centers to Amazon Web Services, Microsoft Azure, and Google Cloud. And while a move to the cloud offers plenty of benefits, it does have drawbacks: companies need to rebuild the systems they use to certify compliance with various business regulations, such as the PCI standards required for any business that stores and processing credit-card numbers, or HIPAA regulations that affect healthcare companies.

And while moving to the cloud is a huge trend these days, many companies are wary of transitioning their most critical data off their own servers. In the wake of data privacy scandals and breaches, companies have come under the microscope for how they handle their information, making compliance even more important.

“We’re seeing this confluence of more compliance standards and everybody wanting to move to the cloud but really struggling with how to do so from a macro level,” Wells said.

Wells and Schwan say their focus on security and infrastructure has often kept them in the background. They worked together at Tommy Bahama in Seattle, and they helped build out the infrastructure for Taco Bell and Dunkin Donuts’ mobile apps.

Shujinko translates to protagonist or main character in Japanese. Wells and Schwan said that after years of working mostly behind the scenes they are ready to step into the spotlight.

“You can’t see what I do but if it goes away the whole thing is broken,” Schwan once told his daughter about the work he did on the Taco Bell and Dunkin Donuts mobile apps. “For once in our lifetimes, we’re focused on being the hero of our story and being the main character.”

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