OneTrust, an Atlanta-based privacy, security and third-party risk technology platform, announced this morning it has raised a massive $210 million Series B. The financing more than doubled its valuation to $2.7 billion.
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The investment comes just seven months after OneTrust raised an also massive $200 million Series A at a $1.3 billion valuation. It brought the company’s total venture raised to $410 million since its 2016 inception. (Insight Partners led that round as well.)
I hopped on the phone with OneTrust chairman Alan Dabbiere, who said the company has been seeing explosive growth. By explosive we mean its headcount and customers surged from 600 and 2,000, respectively, in February 2019 to 1,500 employees and 5,000 customers today (including half the Fortune 500).
While he declined to provide growth metrics for 2019, the Atlanta Business Chronicle previously reported that OneTrust had seen a staggering 22,000 percent revenue growth from 2016 to 2018.
There’s no doubt that much of that growth is related to the fact that it helps organizations comply with global regulations like General Data Protection Regulation and now in California, the California Consumer Privacy Act that went into effect on Jan. 1.
“Certainly, the concern for privacy is driving our business,” Dabbiere told me. “We’re seeing the transition from companies being fearful or scared of compliance issues to every CEO wanting to get closer to their customer.
“The challenge they have is wanting to get a lot more data about customers so they can serve them better,” he continued. “But every CEO is also scared of ending up on the front of The Wall Street Journal because someone on their team overreached.”
So much, so soon
I was curious why OneTrust, if it was seeing such remarkable growth, felt the need to raise its Series B round so soon after its Series A financing. According to Dabbiere, the majority of the funds from OneTrust’s Series A are still available. But more capital gives the company “dry powder” to go after what it sees as “significant opportunities” for growth.
“We want to move fast on any organic and inorganic growth opportunities we may see in the market,” he told Crunchbase News.
Dabbiere said the doubling of the company’s valuation is indicative of OneTrust’s recent success.
“When a VC invests in a company, they have certain growth expectations built into the number they give you,” he said. “In the last seven months, our valuation went from $1.3 billion to $2.7 billion. That tells you that we knocked it out of the park even relative to some lofty expectations. We had a really fantastic back half of the year.”
Standing out in a crowded market
While there’s a slew of companies focused on the data privacy space, as our own Gene Teare reported yesterday, OneTrust does appear to have a strong foothold in the market. (In December I covered a new entrant to the market, Austin-based Osano.)
But despite all the competition, OneTrust stands out, according to a recent analysis of the privacy market by research giant IDC.
In that report, IDC said: “OneTrust continues to dominate the privacy management market through exponential growth, organic growth as well as acquisitions. … They are growing horizontally into the governance, risk, and compliance space as well.”
Indeed, OneTrust has acquired four companies over its lifetime, and plans to continue buying more with its new capital, according to Dabbiere. This is a strategy that the company believes will make its offerings even more valuable to customers.
Dabbiere believes that part of what sets OneTrust apart from its competition is that it continues to develop new modules that are important to customers.
“As our existing 5,000 customers continue to buy more and more modules from us, we expect our growth to only continue,” Dabbiere told me. “In a fairly short amount of time, we have made the transition from a handful of products to a fully integrated platform with a broad suite of products that responds to the trust and risk needs of our customers.”
Richard Wells, managing director at Insight Partners, which led the deal, said the OneTrust team has exemplified the saying: “Skate to where the puck is going to be, not to where it has been.”
“Kabir [Barday] and team founded the business at such an opportune time, recognizing the looming privacy regulations globally,” he wrote via email. “When GDPR went into effect in May 2018, the product was market proven and the team, which we had previously backed at AirWatch, was ready to hit the ground running.”
As mentioned above, GDPR’s U.S.-based successor, CCPA, went into effect last month and OneTrust is already seeing massive demand from the market, Wells added.
“The pace at which OneTrust has been able to release new modules and partner integrations is a testament to their innovative technology,” he said. “They are building a true platform that we believe will be embedded in the privacy officer’s workflow for businesses of all sizes.”
For more on the surprisingly robust Atlanta startup scene, check out my in-depth look at the market here.
Illustration: Li-Anne Dias