In the privacy technology vendor marketplace, the last year-plus has been marred by the unavailability of investor funds. Prior years saw venture capital money flow generously to numerous privacy tech startups aiming to streamline prospective customers' compliance efforts.
One company that is seemingly bucking the current trend is Austin, Texas-based Osano, a data privacy and compliance solutions developer for small and medium-sized businesses. On top of securing USD25 million in Series B funding in August, Osano made another investment wave in the vendor space 5 Dec. by acquiring fellow vendor WireWheel for an undisclosed sum.
Osano co-founder and CEO Arlo Gilbert said the acquisition allows Osano to expand its offerings to cater to large enterprise customers and compete for a larger share of the privacy program management market.
"As part of the (August) fundraise, one of our big goals is to start moving up market into larger businesses," Gilbert told the IAPP. At the time of the August funding round, Gilbert said the goal with fresh capital was to used to expand several departments and grow its research and development. "Our goal for the next year-and-half-to-two years really is to start marching up market into larger enterprises who have more complex requirements and who also have more complex problems to deal with. So, the acquisition of WireWheel just made a lot of sense for us."
Osano currently boasts approximately 15% of Fortune 500 companies as clients, according to Gilbert. That clientele is primarily comprised of large banks, health care providers and retailers.
However, with most of Osano's clients being SMEs, Gilbert said integrating WireWheel's solutions for privacy program management on the enterprise level would make for a solid foundation for his company's goal of competing for new large-scale customers.
Gilbert said he and WireWheel CEO and founder Justin Antonipillai realized during negotiations that both companies offered virtually identical solutions, but for companies with differing economies of scale.
"When you go down the line of all the core capabilities for privacy software, WireWheel offered them and so did we, but their offerings were very much targeted at large enterprise customers, that's their DNA," Gilbert said. "We started talking about what the world would look like if we capture that entire market instead of having our own areas of focus. We came to an agreement, and we ultimately felt the two companies were a true 'better together' story."
Antonipillai said existing WireWheel customers will see no interruption with their services. The two companies joining forces will create a single streamlined platform for businesses of all sizes to enjoy effective privacy management solutions.
"Simply put, this transaction enables the privacy community to get more terrific technology on a single, simple, advanced platform," Antonipillai told the IAPP. "We work in a great community, with privacy professionals around the world regularly demonstrating their deep commitment to their companies and to protecting privacy. They need to do more with less, and I'm proud that WireWheel will continue the mission to drive efficient privacy protection around the world."
With the acquisition finalized, Gilbert wanted to reassure WireWheel customers that "continuity" of services "is the number one goal with this acquisition." He said his vision for how future Osano-WireWheel solutions will be offered on the market will be rolled out in the middle of Q1 2024.
"We spent time in their products, we spent a fair amount of time looking at code; the tech stack, and we got very comfortable with the fact that WireWheel built well-architected solutions," Gilbert said. "Now one of the decisions that will be going forward is whether we keep their products, whether we roll their products into our catalog or whether we migrate those customers from WireWheel into Osano offerings, and that’s still to be determined."
The deal paves the way for a dramatic expansion to Osano's customer base, but Gilbert has bigger aspirations. He said his company is actively seeking strategic acquisitions to further his goal of competing in the privacy program management space, highlighting a goal of a dozen vendor acquisitions in the next two years.
"We would like to be the single largest buyer of data privacy and governance related companies over the next two years," Gilbert said. "We're very much focused on technology acquisitions that make a lot of sense and provide our customers with something new that we don't currently offer. Unless we happen to find somebody who offers the world's greatest 'X,' and our 'X' is a year away from that (caliber), I would predominantly be focused on acquiring new technologies."
On the other end of the agreement, Antonipillai thanked investors and the WireWheel team and invited supporters to "stay tuned" for his next career move, which he said is currently undetermined.
"I am really grateful to WireWheel's investors, partners, customers, and so many personal friends in our community who have supported WireWheel, the Spokes conferences, and me personally," Antonipillai said. "I will need a few minutes to decide on my next step, but it won't be long. I'm excited to continue to drive innovation in this space, especially with the rise of AI and quantum technologies."
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