Ethyca, a startup that helps companies manage customer information and comply with European privacy regulations, raised $4.2 million on Thursday, a day after the U.S. levied a historic fine on Facebook for violating consumers’ data security rights.
The seed funding, led by IA Ventures and Founder Collective, will be used to further develop the one-year-old startup’s platform and capabilities. Table Management, Sinai Ventures, Cheddar founder and CEO Jon Steinberg and Jonah Goodhart, co-founder of adtech startup Moat, also participated.
Ethyca offers a variety of automated privacy infrastructure tools, including real-time data mapping, customer consent tracking and the ability for consumers to see, edit or delete their own data. Companies can also define which employees can access certain types of data.
The General Data Protection Regulation (GDPR) was implemented last year to protect the personal information of citizens in the European Union. The regulation affects all entities operating in the EU, even if they are not physically located in the region. Depending on the severity of an infringement, companies can face penalties of up to 4% of worldwide revenue or €20 million ($22.5 million), depending on which is a higher total.
- Current GDPR compliance processes, such as audits of possessed data or appointment of an employee who is solely responsible for ensuring cross-organization compliance, tend to be manual and costly.
- At the end of 2018, over half (56%) of companies reported that they were “far from compliance or will never comply” with GDPR, according to a report from the International Association of Privacy Professionals.
- On top of the FTC’s $5 billion fine against Facebook, the commission also ordered Facebook to take new transparency and accountability precautions and create new tools that enable the FTC to better monitor the social network’s data activities.
- Competitors including Segment and InCountry are mainly data management startups that have expanded into GDPR compliance. Content platforms like email marketer MailChimp, have also introduced features to help customers comply.
- Karma Take: As regulators are stepping up penalties against social media giants, private companies are creating new tools addressing users’ privacy concerns.