Weeks before the world shut down in the early days of the COVID-19 pandemic, OneTrust received $210 million in Series B funding, which, at the time, put the privacy management software company's estimated value at $2.7 billion.
Ten months later, the technology vendor bookended its year with similar investment news. On Monday, OneTrust announced it closed a $300 million Series C funding round, led by the equity firm TCV and with participation from existing investors Coatue and Insight Partners.
With this new round of financing, OneTrust is now valued at an estimated $5.1 billion.
OneTrust CEO Kabir Barday, CIPP/E, CIPP/US, CIPM, CIPT, FIP, is excited about what the investments mean not only for his company, but also for the privacy industry at large.
"It’s an exclamation point on the fact that privacy, and more broadly trust, is just such a critical part of a company’s infrastructure today," Barday said. "These types of valuations and fundraisers are not typical for compliance technology. It’s really a signal that the market has shifted to be more strategic than compliant. It’s really one of the key ways companies can differentiate today."
OneTrust's successful funding round is yet another example of the investor community's continued interest in the privacy industry. Barday said he expects similar announcements to continue to appear in the months and years ahead.
As it turns out, days before OneTrust made its announcement, BigID closed a $70 million Series D funding round, led by Glynn Capital. BigID has managed to raise $165 million over the past two years, joining OneTrust in its unicorn status, now valued at $1 billion.
It's likely investment in privacy technology will continue as more organizations look to technology to avoid penalties for violating the EU General Data Protection Regulation and other privacy laws around the world. Following OneTrust's Series A funding round in July 2019, IAPP Vice President and Chief Knowledge Officer Omer Tene wrote, "it is clear that enterprise-wide privacy management is here to stay."
With this new investment, Barday said the company's plans have not been altered despite its new financial resources, as OneTrust has neither tapped into any of its Series B money nor has it exhausted the capital it received from the Series A funding round it closed in July 2019.
The money will be used to accelerate OneTrust's current work and help it dive into different technologies. Barday said OneTrust plans to invest heavily in artificial intelligence and machine learning, adding it will "go deeper into automating the company’s infrastructure." He also said OneTrust wants to provide same-day support for customers that will have to deal with upcoming privacy laws in India and China, among others.
The COVID-19 pandemic prompted organizations to adjust practices to suit a world that has become very digital, very quickly. Barday cited this shift as one of the reasons OneTrust has grown in a year dominated by uncertainty.
"This year, we’ve seen customers speed up their digital transformation, speed up their cloud migration and speed all these things enabling teleworking. (This requires) new data collection, new types of monitoring and new types of understanding about your customers," Barday said. "All of that just increases the risks of privacy around all of these different things, and it also increased the value that you get if you do it right."
Even with all of the recent success OneTrust has enjoyed, Barday said he and his team are committed to staying grounded to ensure they continue to assist their customers with their compliance obligations.
He also acknowledges that while it is easy to look at the positives, it is important to remember that 2020 was an incredibly difficult year. Barday called 2020 the most challenging year he had as a CEO, adding it was a learning experience to keep his company in strong standing while attending to his employees' personal needs.
"It’s crazy to look back in terms of how far we have come and how proud I know our team is and how we can continue to deliver through all of that," Barday said. "I think ultimately it makes us a stronger company on the other side of this entire environment."
Photo by Joshua Hoehne on Unsplash
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