It was right in the heart of summer last year when investors and venture capitalists opened their wallets and injected an influx of cash into the burgeoning privacy technology market. Vendors received millions of dollars per each round of funding — here, here and here — at a time where the demand for privacy technology was at a steady escalation.
The compliance requirements of the EU General Data Protection Regulation, California Consumer Privacy Act and other privacy laws around the world were not to be ignored, and organizations found they needed to invest in the proper tools to stay on top of those rules or risk strict financial penalties.
Within the first days of 2020, the trend from last summer shows no signs of slowing down.
On Monday, BigID announced it has received $50 million in funding from Tiger Global. With the latest investment, the vendor has now raised $144 million in less than two years, according to BigID CEO and Co-Founder Dimitri Sirota.
"It was too good to pass up. We got a great new partner and additional capital, which we didn’t really need," Sirota said in a phone interview with Privacy Tech. "We are not even halfway through our Series B, but you know what they say is that you take capital when it’s available, not when you need it. It does allow us to accelerate some of our plans in terms of product introductions."
Sirota and BigID had been fielding phone calls from investors soon after the company announced it had received $50 million in Series C funding last September. The deal with Tiger Global moved quickly, as Sirota said the two sides reached an agreement in a matter of weeks.
"They are going to help, and they are going to assist, but like a lot of later day investors, they are not there day to day," Sirota said. "I think we’ve already been able to demonstrate to a lot of people that we know how to build and sell. Now it’s about taking that growth capital to scale."
Sirota and BigID plan to use the funding to enhance its data discovery capabilities and broaden them to find additional use cases not only in privacy, but also in areas around data governance and data protection. Sirota believes investments into engineering will help BigID accomplish its goal. He added the monetary resources will help the company as it develops its partner ecosystem, as well.
Sirota expects the fruits of the funding to appear throughout 2020. He points to this year's IAPP Global Privacy Summit and the RSA Conference as two events where BigID might unveil new offerings that benefited from the increased capital. Of course, more money means heightened expectations, and Sirota knows BigID will need more feet on the ground to reach its revenue goals.
"Obviously, we wouldn’t take the money if we didn’t think there was demand and appetite," Sirota said. "If you think about year one for us in terms of revenue, it was really about proving someone would give you money. Year two was showing repeatability. And year three, what we are starting, is really about scaling out globally. What we’ve seen is that we have customers around the world, so we know there’s demand for our type of product across small, medium and large companies around the world, and this funding allows us to scale that out."
The privacy tech industry may have been in its infancy when BigID was formed in 2016, but the future may be brighter for those entering the market now as organizations and venture capitalists seem to think privacy will take the same path security did years earlier.
"If you think back 20 years ago in the mid-'90s, there was no security category. Security was done like how privacy is done today through process, policy and people. It wasn’t really done through product," Sirota said. "Then came along a firewall company, and 20 years later, there’s a whole industry with dedicated professionals and billions being spent. Privacy is just going through that shift, and I think correspondingly a lot of VCs are trying to place bets."
So, how do certain companies rise above the rest?
Sirota believes the companies that are able to demonstrate they can execute across the right thresholds will be the ones that attract the eyes of investors. Venture capitalists are attracted to winners and industry leaders, and Sirota said BigID's specific focus helps them stand out in the market.
"We don’t claim to do everything. We don’t really do the privacy (governance, risk management and compliance) stuff. We don’t do (privacy impact assessments)," Sirota said. "We do something specific around helping organizations get visibility into the data they collect and process from their customers to support things like (data subject access requests)."
Investing in engineering and building partnerships may be tangible benefits BigID can tie to its new financial resources. However, Sirota added one more: BigID can assure its customers that it isn't going anywhere.
"We care as all companies should about our customers. It gives them the confidence that we will be around and we will be able to support them globally," Sirota said. "To some degree, there’s a level of confidence and security that this gives to our buyer, and I think that’s an important thing to note and part of the reason why we decided to bring forward our funding and do it sooner instead of waiting around."
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