Personal blog of Yzmir Ramirez

Privacy data mismanagement is a lurking liability within every commercial enterprise. The very definition of privacy data is evolving over time and has been broadened to include information concerning an individual’s health, wealth, college grades, geolocation and web surfing behaviors. Regulations are proliferating at state, national and international levels that seek to define privacy data and establish controls governing its maintenance and use.

Existing regulations are relatively new and are being translated into operational business practices through a series of judicial challenges that are currently in progress, adding to the confusion regarding proper data handling procedures. In this confusing and sometimes chaotic environment, the privacy risks faced by almost every corporation are frequently ambiguous, constantly changing and continually expanding.

Conventional information security (infosec) tools are designed to prevent the inadvertent loss or intentional theft of sensitive information. They are not sufficient to prevent the mismanagement of privacy data. Privacy safeguards not only need to prevent loss or theft but they must also prevent the inappropriate exposure or unauthorized usage of such data, even when no loss or breach has occurred. A new generation of infosec tools is needed to address the unique risks associated with the management of privacy data.

The first wave of innovation

A variety of privacy-focused security tools emerged over the past few years, triggered in part by the introduction of GDPR (General Data Protection Regulation) within the European Union in 2018. New capabilities introduced by this first wave of innovation were focused in the following three areas:

Data discovery, classification and cataloging. Modern enterprises collect a wide variety of personal information from customers, business partners and employees at different times for different purposes with different IT systems. This data is frequently disseminated throughout a company’s application portfolio via APIs, collaboration tools, automation bots and wholesale replication. Maintaining an accurate catalog of the location of such data is a major challenge and a perpetual activity. BigID, DataGuise and Integris Software have gained prominence as popular solutions for data discovery. Collibra and Alation are leaders in providing complementary capabilities for data cataloging.

Consent management. Individuals are commonly presented with privacy statements describing the intended use and safeguards that will be employed in handling the personal data they supply to corporations. They consent to these statements — either explicitly or implicitly — at the time such data is initially collected. Osano, Transcend.io and DataGrail.io specialize in the management of consent agreements and the enforcement of their terms. These tools enable individuals to exercise their consensual data rights, such as the right to view, edit or delete personal information they’ve provided in the past.

A new startup is clearing the way for other companies to better monitor and manage their risk and compliance with privacy laws.

Osano, an Austin, Texas-based startup, bills itself as a privacy platform startup, which uses a software-as-a-service solution to give businesses real-time visibility into their current privacy and compliance posture. On one hand, that helps startups and enterprises large and small insight into whether or not they’re complying with global or state privacy laws, and manage risk factors associated with their business such as when partner or vendor privacy policies change.

The company launched its privacy platform at Disrupt SF on the Startup Battlefield stage.

Risk and compliance is typically a fusty, boring and frankly unsexy topic. But with ever-changing legal landscapes and constantly moving requirements, it’s hard to keep up. Although Europe’s GDPR has been around for a year, it’s still causing headaches. And stateside, the California Consumer Privacy Act is about to kick in and it is terrifying large companies for fear they can’t comply with it.

Osano mixes tech with its legal chops to help companies, particularly smaller startups without their own legal support, to provide a one-stop shop for businesses to get insight, advice and guidance.

“We believe that any time a company does a better job with transparency and data protection, we think that’s a really good thing for the internet,” the company’s founder Arlo Gilbert told TechCrunch.

Gilbert, along with his co-founder and chief technology officer Scott Hertel, have built their company’s software-as-a-service solution with several components in mind, including maintaining its scorecard of 6,000 vendors and their privacy practices to objectively grade how a company fares, as well as monitoring vendor privacy policies to spot changes as soon as they are made.

One of its standout features is allowing its corporate customers to comply with dozens of privacy laws across the world with a single line of code.

You’ve seen them before: The “consent” popups that ask (or demand) you to allow cookies or you can’t come in. Osano’s consent management lets companies install a dynamic consent management in just five minutes, which delivers the right consent message to the right people in the best language. Using the blockchain, the company says it can record and provide searchable and cryptographically verifiable proof-of-consent in the event of a person’s data access request.

“There are 40 countries with cookie and data privacy laws that require consent,” said Gilbert. “Each of them has nuances about what they consider to be consent: what you have to tell them; what you have to offer them; when you have to do it.”

Osano also has an office in Dublin, Ireland, allowing its corporate customers to say it has a physical representative in the European Union — a requirement for companies that have to comply with GDPR.

And, for corporate customers with questions, they can dial-an-expert from Osano’s outsourced and freelance team of attorneys and privacy experts to help break down complex questions into bitesize answers.

Or as Gilbert calls it, “Uber, but for lawyers.”

The concept seems novel but it’s not restricted to GDPR or California’s upcoming law. The company says it monitors international, federal and state legislatures for new laws and changes to existing privacy legislation to alert customers of upcoming changes and requirements that might affect their business.

In other words, plug in a new law or two and Osano’s customers are as good as covered.

Osano is still in its pre-seed stage. But while the company is focusing on its product, it’s not thinking too much about money.

“We’re planning to kind of go the binary outcome — go big or go home,” said Gilbert, with his eye on the small- to medium-sized enterprise. “It’s greenfield right now. There’s really nobody doing what we’re doing.”

The plan is to take on enough funding to own the market, and then focus on turning a profit. So much so, Gilbert said, that the company is registered as a B Corporation, a more socially conscious and less profit-driven approach of corporate structure, allowing it to generate profits while maintaining its social vision.

The company’s idea is strong; its corporate structure seems mindful. But is it enough of an enticement for fellow startups and small businesses? It’s either dominate the market or bust, and only time will tell.

GDPR, and the newer California Consumer Privacy Act, have given a legal bite to ongoing developments in online privacy and data protection: it’s always good practice for companies with an online presence to take measures to safeguard people’s data, but now failing to do so can land them in some serious hot water.

Now — to underscore the urgency and demand in the market — one of the bigger companies helping organizations navigate those rules is announcing a huge round of funding. OneTrust, which builds tools to help companies navigate data protection and privacy policies both internally and with its customers, has raised $200 million in a Series A led by Insight that values the company at $1.3 billion.

It’s an outsized round for a Series A, being made at an equally outsized valuation — especially considering that the company is only three years old — but that’s because of the wide-ranging nature of the issue, according to CEO Kabir Barday, and OneTrust’s early moves and subsequent pole position in tackling it.

“We’re talking about an operational overhaul in a company’s practices,” Barday said in an interview. “That requires the right technology and reach to be able to deliver that at a low cost.” Notably, he said that OneTrust wasn’t actually in search of funding — it’s already generating revenue and could have grown off its own balance sheet — although he noted that having the capitalization and backing sends a signal to the market and in particular to larger organizations of its stability and staying power.

Currently, OneTrust has around 3,000 customers across 100 countries (and 1,000 employees), and the plan will be to continue to expand its reach geographically and to more businesses. Funding will also go toward the company’s technology: it already has 50 patents filed and another 50 applications in progress, securing its own IP in the area of privacy protection.

OneTrust offers technology and services covering three different aspects of data protection and privacy management.

Its Privacy Management Software helps an organization manage how it collects data, and it generates compliance reports in line with how a site is working relative to different jurisdictions. Then there is the famous (or infamous) service that lets internet users set their preferences for how they want their data to be handled on different sites. The third is a larger database and risk management platform that assesses how various third-party services (for example advertising providers) work on a site and where they might pose data protection risks.

These are all provided either as a cloud-based software as a service, or an on-premises solution, depending on the customer in question.

The startup also has an interesting backstory that sheds some light on how it was founded and how it identified the gap in the market relatively early.

Alan Dabbiere, who is the co-chairman of OneTrust, had been the chairman of Airwatch — the mobile device management company acquired by VMware in 2014 (Airwatch’s CEO and founder, John Marshall, is OneTrust’s other co-chairman). In an interview, he told me that it was when they were at Airwatch — where Barday had worked across consulting, integration, engineering and product management — that they began to see just how a smartphone “could be a quagmire of privacy issues.”

“We could capture apps that an employee was using so that we could show them to IT to mitigate security risks,” he said, “but that actually presented a big privacy issue. If [the employee] has dyslexia [and uses a special app for it] or if the employee used a dating app, you’ve now shown things to IT that you shouldn’t have.”

He admitted that in the first version of the software, “we weren’t even thinking about whether that was inappropriate, but then we quickly realised that we needed to be thinking about privacy.”

Dabbiere said that it was Barday who first brought that sensibility to light, and “that is something that we have evolved from.” After that, and after the VMware sale, it seemed a no-brainer that he and Marshall would come on to help the new startup grow.

Airwatch made a relatively quick exit, I pointed out. His response: the plan is to stay the course at OneTrust, with a lot more room for expansion in this market. He describes the issues of data protection and privacy as “death by 1,000 cuts.” I guess when you think about it from an enterprising point of view, that essentially presents 1,000 business opportunities.

Indeed, there is obvious growth potential to expand not just its funnel of customers, but to add more services, such as proactive detection of malware that might leak customers’ data (which calls to mind the recently fined breach at British Airways), as well as tools to help stop that once identified.

While there are a million other companies also looking to fix those problems today, what’s interesting is the point from which OneTrust is starting: by providing tools to organizations simply to help them operate in the current regulatory climate as good citizens of the online world.

This is what caught Insight’s eye with this investment.

“OneTrust has truly established themselves as leaders in this space in a very short time frame, and are quickly becoming for privacy professionals what Salesforce became for salespeople,” said Richard Wells of Insight. “They offer such a vast range of modules and tools to help customers keep their businesses compliant with varying regulatory laws, and the tailwinds around GDPR and the upcoming CCPA make this an opportune time for growth. Their leadership team is unparalleled in their ambition and has proven their ability to convert those ambitions into reality.”

Wells added that while this is a big round for a Series A it’s because it is something of an outlier — not a mark of how Series A rounds will go soon.

“Investors will always be interested in and keen to partner with companies that are providing real solutions, are already established and are led by a strong group of entrepreneurs,” he said in an interview. “This is a company that has the expertise to help solve for what could be one of the greatest challenges of the next decade. That’s the company investors want to partner with and grow, regardless of fund timing.”