The General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act will be in full effect starting this July 1st. Businesses are rushing to ensure that they are properly safeguarding their customers’ private data. Ethyca is the newly-launched software service that automates the entire customer data compliance process for businesses of all sizes, especially data-intensive businesses. The company offers two types of solutions – one that sits in the cloud and another for larger enterprises that integrates with their existing infrastructure. Both allow companies to implement privacy solutions that are compliant, flexible, and developer-friendly. Customers already using the platform include Away, Parachute Home, and Aspire IQ.
AlleyWatch caught up with CEO and Cofounder Cillian Kieran to learn more about Ethyca offers and the launch of Ethyca Pro. Since the company’s founding in 2018, Ethyca has now raised a total of $20M across three rounds and has a total of 19 employees.
Who were your investors and how much did you raise?
We announced our $13.5M in Series A funding, bringing total funding to $20M.
We’ve got some great investors such Affirm and PayPal cofounder Max Levchin’s SciFi VC, CAA cofounder Michael Ovitz, Warby Parker cofounders Neil Blumenthal and Dave Gilboa, Harry’s cofounder Jeff Raider, Allbird’s cofounder Joey Zwillinge, Behance cofounder Scott Belsky, former Chief Data Scientist of the US Office of Science and Technology Policy DJ Patil, Lachy Groom, as well as Abstract Ventures.
IA Ventures followed on its previous investment in the company with Roger Ehrenberg joining Ethyca’s Board of Directors.
Tell us about the product or service that Ethyca offers.
Our software automates the management of personal data, such as an organizations obligation to let individuals access the information it holds about them under regulations like CCPA and GDPR.
Ethyca Pro is a cloud product in that it’s hosted by us. It’s managed by us; it holds only one piece of personal information, and that is the identity of the user making a request for their privacy.
For larger customers with more complex systems, the delivery model is different. Enterprise technology is deployed into customers’ infrastructure, so it’s internal to the organization as managed by them. It’s more like developer tools that sit between data storage systems and applications, and it manages privacy obligations for engineers and data scientists.
Ethyca Pro is priced according to the number of systems a customer needs to plug into. It is free up to three. There are small businesses that need to comply with privacy regulations that may not be able to pay the fees today. We did a lot of modeling over the last two and a half years – the average business, even small businesses, typically have about eight destination systems in which data might reside, placing Ethyca’s price point for these customers between $850 and $1.5K per month.
What inspired the start of Ethyca?
In a previous e-commerce business that I founded, we were dealing with a lot of well-known brands. That business grew very quickly and ultimately was sold off about a year and a half ago.
The main reason for that was, during the process of building that data capture platform, we started to look at how we could solve data privacy compliance for ourselves. We had large customers that were not only US-based, wanted to deploy the technology in Europe, were concerned about GDPR, and looked for compliance solutions.
With the fragmentation of global privacy regulations, the importance of privacy is a major issue to users, businesses, and engineers.
A lot of preexisting solutions were based on costly consultants.
How is Ethyca different?
Our product is truly the first self-service and service all regulations. Businesses can begin using for free, enabling automated privacy compliance for a range of companies from startup to enterprise. Ethyca will now allow businesses of all sizes to implement comprehensive privacy management within a few clicks and without a lengthy onboarding process.
What market does Ethyca target and how big is it?
Our target market in terms of the business community is vast. Any company that does business in California and exceed certain thresholds for revenue or user records is subject to CCPA, and the net is even wider for GDPR. One of the reasons we’re seeing a rise in funding in the privacy space is because the number of companies subject to privacy laws is going to continue growing – there are laws on the docket in Brazil, India, and of course, there’s ongoing discussion around a federal US privacy law which would have huge implications for every company in the United States.
Can you discuss the significance of The California Consumer Privacy Act?
In the short term, companies face some pretty significant fines – and that’s all businesses from tech companies like Google, which might have the clout to absorb the fine, to Mom and Pop stores that had to digitize due to the pandemic. They’re an existential risk to how they manage data now.
Longer-term this isn’t taking place in a vacuum – there are more and more jurisdictions on privacy laws. Right now, companies are concerned with applying a ‘band-aid’ for the likes of GDPR and CCPA to avoid the risk of fines, but companies are not thinking holistically about what the industry is facing. Not only is it necessary to comply with the increasingly complex web of global, privacy regulations, but it’s more and more important to consumers that the services they use respect and manage their data ethically. Companies must seize this moment as an opportunity to gain a competitive advantage and differentiate themselves – those who take a transparent and considerate approach towards user data will be rewarded when consumers vote with their feet.
What was the funding process like?
We hadn’t been planning on raising so early in 2020 but received interest from investors in January that prompted the current round.
We did video calls with the West Coast in February and March amid interest from investors. We didn’t need the amount of capital but had to take more from Series A investors. Now we have a very strong runway, can hire talent, and compete with larger companies.
What are the biggest challenges that you faced while raising capital?
Nothing out of the ordinary, we originally didn’t need a pitch deck as we had some great interest from the New York VC community. It was a great validation to have so many top investors impressed by our product.
What factors about your business led your investors to write the check?
I think our vision for what privacy should be is ultimately what won our investors over. We believe that privacy is a technology problem with a technology solution. Whereas some others are coming at this from a legal and compliance background, we’re a team of engineers who understand that ultimately it will be engineers’ job to implement privacy solutions at any business. So a focus on creating tools that developers love, as opposed to tools that a general counsel makes them implement, is what sets us apart in the space.
Whereas some others are coming at this from a legal and compliance background, we’re a team of engineers who understand that ultimately it will be engineers’ job to implement privacy solutions at any business.
What are the milestones you plan to achieve in the next six months?
In the next 6 months, we’re looking to beef up the experience of our self-serve product and make it as simple as possible for anyone to set themselves up and start managing their organization’s privacy.
What advice can you offer companies in New York that do not have a fresh
injection of capital in the bank?
It’s undoubtedly a difficult time for businesses without a lot of cash on hand. We were fortunate to be able to fundraise when we did. My advice would be to treat this as a period to lean up and focus on your product. Those that can make it out of the next six months will be in a stronger position than ever, and in my opinion, it’s about focusing on improvement of whatever is the absolute core value-add of your product.
Where do you see the company going now over the near term?
Back to the office? I kid, but even though health concerns will continue to be top of mind, I’d be lying if I said I didn’t miss the energy and collaborative excitement of all working in Ethyca’s office together.
What’s your favorite restaurant in the city?
So many to mention but I think Tacombi in Soho will always have a special place in my heart for personal reasons!
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