Ethyca raises $13.5M to help businesses automate data privacy and compliance
The upcoming CCPA regulations coming into effect in the U.S. have put a renewed focus on how companies online are handling the issues of data privacy and compliance. Today a startup that's built a platform to help them navigate those waters more easily is announcing a round of funding to meet that demand.
Ethyca, which lets organisations both identify where sensitive data may be used and then provides an easy set of API tools to create permissions, reporting and analytics around it, has raised $13.5 million in financing after picking up a number of major companies, including some high-profile tech companies, as customers.
The crux of the issue that Ethyca is tackling is that online privacy compliance has become a critical issue, in part because of regulations, but mainly because the online world has, before anyone had a chance to blink, become a critical component of our lives, so getting things wrong can be disastrous.
"Move fast and break things sounds good on a T-shirt, but the web is effectively society infrastructure now," explained co-founder and CEO Cillian Kieran, who hails from Ireland but now lives in New York. "If you met a bridge builder wearing a t-shirt saying that you’d panic. So despite the omnipresence of tech we don’t have the tools to deal with privacy issues. The aim here is to build safe systems, and we provide the data and data maps to do that."
The funding comes on the back of a seed round Ethyca raised in July 2019 and brings the total raised to about $20 million.
IA Ventures, Affirm and PayPal co-founder Max Levchin’s SciFi VC, CAA co-founder Michael Ovitz, Warby Parker co-founders Neil Blumenthal and Dave Gilboa, Harry's co-founder Jeff Raider, Allbird’s co-founder Joey Zwillinge, Behance co-founder Scott Belsky, former Chief Data Scientist of the US Office of Science and Technology Policy DJ Patil, Lachy Groom and Abstract Ventures make up the long list of high-profile names and firms that are a part of this latest round, which speaks to some of the traction and attention that New York-based Ethyca has had to date.
On the enterprise side, the company works with a number of large tech businesses, including banks and some major tech companies that don't want their names disclosed, to help them both better map personal data within their systems, as well as create better workflows for extracting that information when it's requested either by a user, or for the purposes of reporting for data compliance regulations, or more often to make sure that when new products are being built, they take that existing personal data into account comply with data policies around it.
If it sounds odd that a tech company might need to turn to a third-party startup for privacy services, it's not so strange. Even at big tech companies, which would have spent years and millions of dollars preparing for privacy regulations, the complexity has meant that not all use cases can be accounted for.
On the smaller end of the scale, it also has a number of well-known brands, like luggage company Away, Parachute Home and Aspire IQ, as well a number of other smaller businesses implementing its tools.
As Kieran describes it, while there are already others out there building tools to navigate data protection and privacy regulations like CCPA and GDPR in Europe (OneTrust and DataGuard being two in the startup arena that have raised big rounds), the aim of Ethyca is to build a layer that makes it quick and relatively easy to implement a compliance layer into a system.
The company has APIs but also now has introduced a self-service version of its product for smaller businesses, which he says means that "any customer can turn it on and follow the automated process in a TurboTax type of way."
CCPA compliance can take 8-10 weeks to implement, and you often need consultants and more technical talent to get the work done and run services afterwards, he said. "Now it can be done in as little as an hour for an average midsized business." Larger companies may take a few days, he added.
Kieran and his co-founder Miguel Burger-Calderon know first-hand about some of the issues that brands and other online businesses might face when it comes to identifying what kind of data might fall under these newer regulations, and the challenges of navigating that once you do. BrandCommerce, a previous company that the two founded, helps brands and businesses build and run D2C operations online. (You can also see, therefore, why Ethyca may have in part picked up the particular investors that it has.)
“Companies can no longer simply strive to be compliant and get by – enterprises need to think long-term and show their customers that they can be trusted with their data," said Roger Ehrenberg of IA Ventures in a statement. "Forward-thinking companies have recognised the value of Ethyca’s product to their bottom line as you can see from looking at the growing set of blue-chip brands and technology customers so far.”
