TrustArc CEO discusses future following $70M funding round
As the global regulatory landscape continues to change, privacy technology has become an important commodity to assist businesses in their compliance efforts. Investors have picked up on this shift and started to look at which privacy tech vendors can help them break into the market. This interest has recently surged after several tech vendors received some notable investments that have left them flushed with cash.
TrustArc was one of the companies to benefit from the windfall. The organization announced it had received $70 million in Series D funding from the private equity firm Bregal Sagemont.
TrustArc CEO Chris Babel is excited for the opportunities the company can pursue with the investment and called the deal a â€œtestament to the growing needs in the marketplace.â€� Companies look for the right balance between using data in new ways and the growing number of privacy laws popping up around the world, and Babel said that is where privacy technology comes into play.
â€œThose two things have a healthy market that finally pushed us past the tipping point,â€� Babel said. â€œFor years, and weâ€™ve been around 20 plus, you can solve privacy with good legal advice, good consultative skills and a team, and thatâ€™s really changing. Not to say that those people arenâ€™t as critical as theyâ€™ve always been. They are, but it needs to be bolstered with technology that helps you scale a program across an organization, whether that organization is big or small.â€�
While this new era of TrustArc may be in its infancy, Babel already has an idea about what the company will do with its new monetary resources. Babel said TrustArc plans to continue to innovate. As new regulation is crafted, or when a new enforcement action results in a different interpretation of a law, Babel said companies need new offerings to help solve those challenges.
Babel expects the fruits of the funding to show up in the second half of 2019. He called TrustArcâ€™s recently released Privacy Profile tool a first step in its next wave of products, but for now, the company plans on keeping its future releases close to the chest.
One area where Babel hopes the investment will help is raising TrustArcâ€™s global profile.
â€œWe have always had a strong U.S. footprint and a growing European and global footprint, and how you accelerate those types of things is a big area of focus for us,â€� Babel said. â€œItâ€™s both to enhance, improve and completely advance the product in ways that people have never seen in this space, as well as how they share it with people so they can reap the benefits of these new technologies.â€�
Sagemont will have a seat on TrustArcâ€™s board, Babel said, which is one of the final pieces of a process that started more than a year ago. Babel said Sagemont was attracted to TrustArc due to what he believes is the companyâ€™s unique approach to helping companies via privacy intelligence.
â€œWhat we are trying to go after is different than others in the sense that it isnâ€™t just automation around grabbing data from other systems via APIs and helping create data inventory,â€� Babel said. â€œItâ€™s really around how the system helps you scale the program through identifying risks, helping you take action and steer you through the process of how to manage these things intelligently. That is really a different mindset than others have and what we have seen historically, and thatâ€™s what attracted Sagemont to us.â€�
TrustArc was a nonprofit through its first 10 years of existence and received funding in 2008, 2010 and 2011. After the final round, Babel said TrustArc was able to grow organically. The company was able to sustain its operations independently for years, but as the EU General Data Protection Regulation drew closer, organizations started looking for compliance assistance. Tech vendors saw an opportunity to fill those needs, and soon after investors began to knock on doors. Babel cited this shift as the moment when TrustArc decided to find a new investor of their own and take a more aggressive market approach.
â€œItâ€™s fair to say that we are one of the few that has survived the multiple phases of the privacy market. We started and were a nonprofit for roughly ten years when the privacy market was nascent,â€� Babel said. â€œThereâ€™s a new wave of companies, now that the market is in a post-GDPR world, that truly need technology.â€�
Despite the eight-year gap between funding rounds, TrustArc is not prepared to alter its business model just yet.
â€œAny time you have new dollars in the bank it allows you to think hard about how you can most effectively use them to help customers,â€� Babel said. â€œWeâ€™ve been funded well, but that last funding was in 2011. This allows for some fundamental changes in how we help people be successful in their privacy programs. But it is also two weeks old, so we havenâ€™t done anything that aggressive to date.â€�
TrustArc joined OneTrust and others as vendors to take in big sums to further their work, and following the launch of initiatives such as the Future of Privacy Forum and Israel Tech Policy Institute’s Privacy Tech Alliance, there will be other opportunities for investors and vendors to meet and make deals. The large figures may be good news for the companies, but Babel believes there should be some excitement saved for the users who will benefit from new solutions designed to help them take on the influx of privacy challenges that lay ahead.