Companies today face hundreds of millions of dollars in fines for failing to comply with data protection and data privacy regulations, and this is driving waves for organizations and their users to get more serious about data protection. A byproduct of this is the emergence of new technologies to meet the growth in activity.
Dataguard A Munich-based startup that is turning to a SaaS-based business model to provide privacy, information security and other data protection to small and medium-sized businesses as a series of on-demand, cloud-based “as-a-service” tools, and today it announced is doing that it has secured $61 million in a Series B round of funding led by Morgan Stanley Expansion Capital to double its market cap.
The investment also includes One Peak, the UK VC that led DataGuard’s last $20 million fundraising in 2020, the startup’s first outside funding. Bastian Nominacher (Co-Founder / Co-CEO of Salonis), Hanno Renner (Co-Founder / CEO of Personio) and Kirsten Thoma (Founder of Hybris) are also participating.
DataGuard is not publishing its valuations. But as another marker of how it’s doing, despite the massive contraction we’ve seen in the tech sector, this startup continues to grow. It now has more than 3,000 customers across 50+ countries and in turn provides tools that cover more than 40 million individual users – employees, customers and other stakeholders. That’s three times its 1,000 subscribers in 2020. While DataGuard doesn’t disclose specific revenue numbers, it says revenue has also grown, about 10 times over the past year. Its definition of SMB is somewhat fluid and includes large mid-market end users: the customer list includes familiar names such as Canon, Hyatt and UNICEF.
DataGuard offers a variety of tools across privacy, data protection and compliance that can assess how data is being used by an organization in a variety of ways. It analyzes this data to determine whether a company is compliant with various certifications (eg, GDPR, CCPA, ISO 27001, TISAX, or SOC 2). And if not, what needs to be done to be compliant.
The basic idea behind DataGuard is that while larger enterprises may have teams of in-house staff — lawyers, engineers and data scientists — working to monitor, implement and adjust the organization’s data security, privacy and compliance policies (a strategy that, Even large amounts of people and budgets often pile it up still going wrong); Smaller organizations may have less human resources but are big enough to work.
Thomas Regier (above, left, who is the co-founder and co-founder of Kivank Virya, right), says its target audience is “someone who is just an IT security person” who may be an expert in network security but not information security. Some of its customers may not have in-house security experts, he added: the task of ensuring how data protection is legally and properly implemented falls to a marketing team: this is because online interactivity with individuals is one of the key areas that data protection covers. It is understood, therefore, that in some cases, it may use the data to ensure that it is being done correctly
“We made it for civilians,” he said.
To be sure, marketing — especially the interface of cookies and data consent related to marketing and “analytics” — has been the most obvious face of data privacy and security to many of us over the past few years. Driven by GDPR and other regulations, we now see those consent windows every day, and many companies have lamented how the popularity of “reject all” has affected the bottom line. And the big headlines we read about data protection breaches are pretty much the same: In one instance earlier this month, Instagram was fined more than $400 million for misusing children’s data under GDPR rules in Europe.
But Regier says that these days, there’s additional pressure beyond the very bad publicity agencies get from fine investigative exposure in the media:
“Marketing is a huge piece of the puzzle, but the second piece is companies protecting their customers’ data,” he said. “They need that up shore. They have no choice because if they don’t they’ll lose those customers now. It’s gone beyond the fig leaf and into the core of the business.” with this, Cyber insurance premiums have gone up, another sign of how businesses are affected financially when they don’t implement strong security and data protection. (Whether these premiums are effective is debatable other reasonsHowever.)
A third important driver is the commercial pressure DataGuard is seeing among its customers. That is, organizations are now becoming more proactive in vetting partners so that they are held accountable, both on a proactive and reactive basis when things go wrong.
Interestingly, using mechanics that are remarkably similar to how data brokers operate, DataGuard can also look at how a company’s data might be used by third parties and customers, to determine where it might be non-compliant, or vice versa in the event that May alert third parties. Any information that has been compromised. It’s becoming increasingly important to get that big picture as part of the verification process when companies work on procurement deals, which implies that the business-critical nature of the work isn’t exhaustive to ensure.
The compliance part of the business, a new area, but one that will use some of these investments to continue developing the company. This potentially opens the door for DataGuard, which offers similar services, to examine more aspects of security and data protection, such as when it crosses over into data networking and endpoint management.
Also, DataGuard has grown as much as it has little outside funding, all because investors are knocking.
“Data privacy, data protection and compliance are areas of increasing focus for regulators, enterprises and consumers worldwide at a time when the amount of sensitive data that businesses must process to operate is growing exponentially,” said Lincoln Isetta, Morgan Stanley’s MD Expansion Capital. , in a statement. “It’s clear from our diligence that DataGuard’s unique, all-in-one platform allows customers to go beyond simple ‘check-the-box’ compliance, information security and data privacy practices and instead manage data as a competitive differentiator. We are thrilled to join the DataGuard team and look forward to helping them build on their success.”
“DataGuard has seen strong growth since our initial investment which speaks to the drive and execution ability of the founders and their leadership team. DataGuard has helped create a new segment that is both extremely scalable and business critical,” One Peak managing partner David Klein and partner Christoph Maier added in a joint statement. “Over the next decade, companies will invest billions of dollars in compliance and security to become and remain trusted partners. We were the first institutional investor in DataGuard in 2020 and have been able to double our investment to further accelerate the company’s growth trajectory and expand its geographic reach. We are thrilled.”