Mar
23
2021
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OneTrust adds ethics to its privacy platform with Convercent acquisition

OneTrust, a late stage privacy platform startup, announced it was adding ethics and compliance to the mix this morning by acquiring Convercent, a company that was built to help build more ethical organizations. The companies did not share the purchase price.

OneTrust just raised $300 million on a fat $5.1 billion valuation at the end of last year, and it’s putting that money to work with this acquisition. Alan Dabbiere, co-chairman at OneTrust sees this acquisition as a way to add a missing component to his company’s growing platform of services.

“Integrating Convercent instantly brings a proven ethics and compliance technology, team, and customer base into the OneTrust, further aligning the Chief Ethics & Compliance Officer strategy alongside privacy, data governance, third-party risk, GRC (governance, risk and compliance), and ESG (environmental, social and governance) to build trust as a competitive advantage,” he said.

Convercent brings 750 customers and 150 employees to the OneTrust team along with its ethics system, which includes a way for employees to report ethical violations to the company and a tool for managing disclosures.

Convercent can also use data to help surface bad behavior before it’s been reported. As CEO Patrick Quinlan explained in a 2018 TechCrunch article:

“Sometimes you have this interactive code of conduct, where there’s a new vice president in a region and suddenly page views on the sexual harassment section of the Code of Conduct have increased 200% in the 90 days after he started. That’s easy, right? There’s a reason that’s happening, and our system will actually tell you what’s happening.”

Quinlan wrote in a company blog post announcing the deal that joining forces with OneTrust will give it the resources to expand its vision.

“As a part of OneTrust, we’ll be combining forces with the leader across privacy, security, data governance, third-party risk, GRC, ESG—and now—ethics and compliance. Our customers will now be able to build centralized programs across these workstreams to make trust a competitive differentiator,” Quinlan wrote.

Convercent was founded in 2012 and has raised over $100 million, according to Pitchbook data. OneTrust was founded in 2016. It has over 8000 customers and 150 employees and has raised $710 million, according to the company.

Dec
21
2020
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OneTrust nabs $300M Series C on $5.1B valuation to expand privacy platform

OneTrust, the four-year-old privacy platform startup from the folks who brought you AirWatch (which was acquired by VMmare for $1.5 billion in 2014), announced a $300 million Series C on an impressive $5.1 billion valuation today.

The company has attracted considerable attention from investors in a remarkably short time. It came out of the box with a $200 million Series A on a $1.3 billion valuation in July 2019. Those are not typical A round numbers, but this has never been a typical startup. The Series B was more of the same — $210 million on a $2.7 billion valuation this past February.

That brings us to today’s Series C. Consider that the company has almost doubled its valuation again, and has raised $710 million in a mere 18 months, some of it during a pandemic. TCV led today’s round joining existing investors Insight Partners and Coatue.

So what are they doing to attract all this cash? In a world where privacy laws like GDPR and CCPA are already in play, with others in the works in the U.S. and around the world, companies need to be sure they are compliant with local laws wherever they operate. That’s where OneTrust comes in.

“We help companies ensure that they can be trusted, and that they make sure that they’re compliant to all laws around privacy, trust and risk,” OneTrust Chairman Alan Dabbiere told me.

That involves a suite of products that the company has already built or acquired, moving very quickly to offer a privacy platform to cover all aspects of a customer’s privacy requirements, including privacy management, discovery, third-party risk assessment, risk management, ethics and compliance and consent management.

The company has already attracted 7,500 customers to the platform — and is adding1,000 additional customers per quarter. Dabbiere says that the products are helping them be compliant without adding a lot of friction to the building or buying process. “The goal is that we don’t slow the process down, we speed it up. And there’s a new philosophy called privacy by design,” he said. That means building privacy transparency into products, while making sure they are compliant with all of the legal and regulatory requirements.

The startup hasn’t been shy about using its investments to buy pieces of the platform, having made four acquisitions already in just four years since it was founded. It already has 1,500 employees and plans to add around 900 more in 2021.

As they build this workforce, Dabbiere says being based in a highly diverse city like Atlanta has helped in terms of building a diverse group of employees. “By finding the best employees and doing it in an area like Atlanta, we are finding the diversity comes naturally,” he said, adding, “We are thoughtful about it.” CEO Kabir Barday also launched a diversity, equity and inclusion council internally this past summer in response to the Black Lives Matter movement happening in the Atlanta community and around the country.

OneTrust had relied heavily on trade shows before the pandemic hit. In fact, Dabbiere says that they attended as many as 700 a year. When that avenue closed as the pandemic hit, they initially lowered their revenue guidance, but as they moved to digital channels along with their customers, they found that revenue didn’t drop as they expected.

He says that OneTrust has money in the bank from its prior investments, but they had reasons for taking on more cash now anyway. “The number one reason for doing this was the currency of our stock. We needed to revalue it for employees, for acquisitions, and the next steps of our growth,” he said.

Jul
11
2019
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OneTrust raises $200M at a $1.3B valuation to help organizations navigate online privacy rules

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.”

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