The privacy technology market has been on a steady growth curve in recent years, and nothing demonstrates that more than the increased venture capital supplying this nascent industry.
On Thursday, privacy management software company OneTrust announced the biggest such investment yet, with $200 million in Series A funding from Insight Partners, a global venture capital and private equity firm known for investing in the tech and software industries. According to OneTrust, the company is now valued at $1.3 billion, making it the first "unicorn" in the privacy tech marketplace. In finance, a unicorn is used to describe a startup valued at more than $1 billion.
"This allows us to invest in big ways," OneTrust CEO Kabir Barday, CIPP/E, CIPP/US, CIPM, CIPT, FIP, said. "It also says that we're here to stay for the long term. We're not a fly-by-night company, and we're not in it to make a quick buck."
Barday said it is important for customers and the industry alike to see this level of investment. In a phone interview with Privacy Tech, he said it isn't just a positive development for OneTrust, but that it is a larger signal for the industry as a whole. No doubt, venture capital investment has steadily made its way into the privacy tech market. On Wednesday, TrustArc announced a $70 million investment, and in recent months, Radar, Privitar and BigID, among several other privacy tech companies, also announced multimillion-dollar investments.
But the $200 million investment into OneTrust is by far the biggest in the industry to date.
Barday said the Series A investment will go into three lines of business. First, it will bolster OneTrust's privacy program management line of products. He said the goal here is to provide a solution to every operational work stream in a privacy department.
The company will also invest in its third-party risk management business line. There's some overlap here with the privacy department, but Barday said these solutions go beyond the privacy office, helping with business continuity, risk management, data security and other well-established and integral business operations.
Finally, funding will improve OneTrust's preference management business line. Again, this has some overlap with the privacy office — the need to manage consent — but this line is specifically geared toward adding value to the marketing department through a suite of tools for marketing teams to manage consumer profiles and consent.
With these three offshoots, OneTrust's services, according to Barday, helps raise the profile of the privacy department within a business. Building tools that cater to the vendor risk management and marketing teams enables the privacy team to engage more deeply with the broader business goals of an organization.
Of course, new privacy regulations are driving the privacy tech market. The EU General Data Protection Regulation and the California Consumer Privacy Act are two of the biggest drivers, but additional privacy laws are emerging across the globe and in many states in the U.S.
Since 2017, the IAPP has been tracking the privacy tech industry through its annual Privacy Tech Vendor Report. The number of companies included in the report has quadrupled in two years from approximately 50 to more than 200 vendors. Stay tuned for the 2019 release in the coming weeks.
The Future of Privacy Forum and the Israeli Tech Policy Institute also recently launched the Privacy Tech Alliance to help promote and facilitate the industry by bringing vendors, investors and other stakeholders together. OneTrust is one of 13 vendors that have joined the alliance's board, including Anonos, BigID, D-ID, Duality, Immuta, Nymity, Privacy Analytics, SAP, Truata, TrustArc, WireWheel and ZL Tech.
For OneTrust, the new investment continues a hockey-stick growth trajectory since its founding in 2016. Barday said the company now has more than 3,000 customers, 1,000 employees and eight offices around the world.
"We're in the big leagues now," Barday said. "The privacy industry has matured dramatically."
But there are industries outside of the privacy world that are beginning to take an interest in the market. Looking ahead, Barday said the "Goliath" security and GRC companies are seeking to get into the game. For the privacy ecosystem to survive longer term, he warned, venture capital investments for privacy-centric vendors is important for privacy. "This investment secures that future for us," he said. "We now have a war chest and we need to build walls for defense."
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