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OneTrust doubles valuation to $2.7B as consumer data laws go global

Global data privacy laws are quickly minting a new sector in software.

Privacy tech startup OneTrust has raised $210 million in a Series B led by Coatue and Insight Partners. The round values the company at $2.7 billion, just eight months after it raised a $200 million Series A at a $1.3 billion valuation.

OneTrust, based in Atlanta and London, is part of a cohort of startups capitalizing on the growing demands that privacy regulations are placing on businesses. Europe’s GDPR set off a cascade of regulatory efforts around privacy, and the California Consumer Privacy Act took effect this year. Similar efforts are being implemented or considered in other US states and around the world.

OneTrust isn’t the only startup to find itself suddenly flush with cash to tackle privacy concerns. San Jose-based Securiti.ai raised $81 million within a year of launching, and fellow data governance firms AvePoint and TrustArc also recently secured large financing rounds.

“This is a space that didn’t really exist four years ago,” said Alan Dabbiere, OneTrust chairman and the founder and former chairman of AirWatch. The significant war chest will allow OneTrust to build its offerings through acquisitions; last year, the startup snapped up two privacy businesses.

The money also demonstrates to potential customers that OneTrust is credible and viable, said Dabbiere. Those characteristics are vital to winning the kinds of large contracts with multinational organizations that the company is targeting.

“The market really rewards platforms,” Dabbiere said. “We are really the first true platform in privacy.” OneTrust says it has grown to 1,500 employees serving 5,000 customers around the world, including nearly half of the Fortune 500, in less than four years.

As demonstrated by the record $5 billion fine imposed on Facebook by the Federal Trade Commission last year, the cost of violating consumer privacy is higher than ever. But even as compliance becomes more stringent, Dabbiere believes that companies’ desire for customer data is only growing. However, they also want to manage that data responsibly and avoid relying on major tech firms to obtain it.

Wherever the fear of regulation meets the desire for data is an opportunity for privacy-focused companies. “What you’ve got is CEOs that have one foot on the gas and one foot on the brake, saying ‘I want to get closer [to customers], but I don’t want to risk my business.’ And I think this is really what’s driving our business,” said Dabbiere.