Personal blog of Yzmir Ramirez

Six months after securing a $23 million Series A round, Ketch, a startup providing online privacy regulation and data compliance, brought in an additional $20 million in A1 funding, this time led by Acrew Capital.

Returning with Acrew for the second round are CRV, super{set} (the startup studio founded by Ketch’s co-founders CEO Tom Chavez and CTO Vivek Vaidya), Ridge Ventures and Silicon Valley Bank. The new investment gives Ketch a total of $43 million raised since the company came out of stealth earlier this year.

In 2020, Ketch introduced its data control platform for programmatic privacy, governance and security. The platform automates data control and consent management so that consumers’ privacy preferences are honored and implemented.

Enterprises are looking for a way to meet consumer needs and accommodate their rights and consents. At the same time, companies want data to fuel their growth and gain the trust of consumers, Chavez told TechCrunch.

There is also a matter of security, with much effort going into ransomware and malware, but Chavez feels a big opportunity is to bring security to the data wherever it lies. Once the infrastructure is in place for data control it needs to be at the level of individual cells and rows, he said.

“If someone wants to be deleted, there is a challenge in finding your specific row of data,” he added. “That is an exercise in data control.”

Ketch’s customer base grew by more than 300% since its March Series A announcement, and the new funding will go toward expanding its sales and go-to-market teams, Chavez said.

Ketch app. Image Credits: Ketch

This year, the company launched Ketch OTC, a free-to-use privacy tool that streamlines all aspects of privacy so that enterprise compliance programs build trust and reduce friction. Customer growth through OTC increased five times in six months. More recently, Qonsent, which developing a consent user experience, is using Ketch’s APIs and infrastructure, Chavez said.

When looking for strategic partners, Chavez and Vaidya wanted to have people around the table who have a deep context on what they were doing and could provide advice as they built out their products. They found that in Acrew founding partner Theresia Gouw, whom Chavez referred to as “the OG of privacy and security.”

Gouw has been investing in security and privacy for over 20 years and says Ketch is flipping the data privacy and security model on its head by putting it in the hands of developers. When she saw more people working from home and more data breaches, she saw an opportunity to increase and double down on Acrew’s initial investment.

She explained that Ketch is differentiating itself from competitors by taking data privacy and security and tying it to the data itself to empower software developers. With the OTC tool, similar to putting locks and cameras on a home, developers can download the API and attach rules to all of a user’s data.

“The magic of Ketch is that you can take the security and governance rules and embed them with the software and the piece of data,” Gouw added.

Jeff Bussgang, a co-founder and general partner at Flybridge Capital, recently wrote an Extra Crunch guest post that argued it is time for a refresh when it comes to the technology adoption life cycle and the chasm. His argument went as follows:

1. VCs in recent years have drastically underestimated the size of SAMs (serviceable addressable markets) for their startup investments because they were “trained to think only a portion of the SAM is obtainable within any reasonable window of time because of the chasm.”
2. The chasm is no longer the barrier it once was because businesses have finally understood that software is eating the world.
3. As a result, the early majority has joined up with the innovators and early adopters to create an expanded early market. Effectively, they have defected from the mainstream market to cross the chasm in the other direction, leaving only the late majority and the laggards on the other side.
4. That is why we now are seeing multiple instances of very large high-growth markets that appear to have no limit to their upside. There is no chasm to cross until much later in the life cycle, and it isn’t worth much effort to cross it then.

Now, I agree with Jeff that we are seeing remarkable growth in technology adoption at levels that would have astonished investors from prior decades. In particular, I agree with him when he says:

The pandemic helped accelerate a global appreciation that digital innovation was no longer a luxury but a necessity. As such, companies could no longer wait around for new innovations to cross the chasm. Instead, everyone had to embrace change or be exposed to an existential competitive disadvantage.

But this is crossing the chasm! Pragmatic customers are being forced to adopt because they are under duress. It is not that they buy into the vision of software eating the world. It is because their very own lunches are being eaten. The pandemic created a flotilla of chasm-crossings because it unleashed a very real set of existential threats.

The key here is to understand the difference between two buying decision processes, one governed by visionaries and technology enthusiasts (the early adopters and innovators), the other by pragmatists (the early majority). The early group makes their decisions based on their own analyses. They do not look to others for corroborative support. Pragmatists do. Indeed, word-of-mouth endorsements are by far the most impactful input not only about what to buy and when but also from whom.

There may be billions of IoT devices in use today, but the tooling around building (and updating) the software for them still leaves a lot to be desired. Esper, which today announced that it has raised a $30 million Series B round, builds the tools to enable developers and engineers to deploy and manage fleets of Android-based edge devices. The round was led by Scale Venture Partners, with participation from Madrona Venture Group, Root Ventures, Ubiquity Ventures and Haystack.

The company argues that there are thousands of device manufacturers who are building these kinds of devices on Android alone, but that scaling and managing these deployments comes with a lot of challenges. The core idea here is that Esper brings to device development the DevOps experience that software developers now expect. The company argues that its tools allow companies to forgo building their own internal DevOps teams and instead use its tooling to scale their Android-based IoT fleets for use cases that range from digital signage and kiosks to custom solutions in healthcare, retail, logistics and more.

“The pandemic has transformed industries like connected fitness, digital health, hospitality, and food delivery, further accelerating the adoption of intelligent edge devices. But with each new use case, better software automation is required,” said Yadhu Gopalan, CEO and co-founder at Esper. “Esper’s mature cloud infrastructure incorporates the functionality cloud developers have come to expect, re-imagined for devices.”

Image Credits: Esper

Mobile device management (MDM) isn’t exactly a new thing, but the Esper team argues that these tools weren’t created for this kind of use case. “MDMs are the solution now in the market. They are made for devices being brought into an environment,” Gopalan said. “The DNA of these solutions is rooted in protecting the enterprise and to deploy applications to them in the network. Our customers are sending devices out into the wild. It’s an entirely different use case and model.”

To address these challenges, Esper offers a range of tools and services that includes a full development stack for developers, cloud-based services for device management and hardware emulators to get started with building custom devices.

“Esper helped us launch our Fusion-connected fitness offering on three different types of hardware in less than six months,” said Chris Merli, founder at Inspire Fitness. “Their full stack connected fitness Android platform helped us test our application on different hardware platforms, configure all our devices over the cloud, and manage our fleet exactly to our specifications. They gave us speed, Android expertise, and trust that our application would provide a delightful experience for our customers.”

The company also offers solutions for running Android on older x86 Windows devices to extend the life of this hardware, too.

“We spent about a year and a half on building out the infrastructure,” said Gopalan. “Definitely. That’s the hard part and that’s really creating a reliable, robust mechanism where customers can trust that the bits will flow to the devices. And you can also roll back if you need to.”

Esper is working with hardware partners to launch devices that come with built-in Esper-support from the get-go.

Esper says it saw 70x revenue growth in the last year, an 8x growth in paying customers and a 15x growth in devices running Esper. Since we don’t know the baseline, those numbers are meaningless, but the investors clearly believe that Esper is on to something. Current customers include the likes of CloudKitchens, Spire Health, Intelity, Ordermark, Inspire Fitness, RomTech and Uber.