Digital banking startup Revolut raises $250M at a valuation of $1.7B

Revolut, the London-based fintech that offers a digital banking account and sprawling set of other financial services, is disclosing that it has raised a whopping $250 million in Series C funding, less than three years since launching.

The new round, which gives the company a $1.7 billion post-money valuation — a five-fold increase in under a year, we’re told — was led by Hong Kong based DST Global, along with a group of new and existing investors that includes Index Ventures, and Ribbit Capital. In case you aren’t keeping up, it brings the total amount raised by Revolut to $340 million in less than 36 months.

To put this into context, TransferWise — London’s undisputed fintech darling and on some features a direct competitor to Revolut — recently announced $280 million in Series D investment, giving the company a reported post-money valuation of $1.6 billion. The difference? It took TransferWise seven years compared to Revolut’s three.

That’s testament to how much value investors are now placing on bank-disrupting fintech or perhaps signs of a fintech bubble. Or both. It is also worth remembering that these are private valuations with neither company yet to float on the public markets, even if TranserWise looks increasingly a candidate to do so.

Meanwhile, Revolut says the new round of funding and surge in valuation follows “incredible growth figures to date,” with the fintech now processing $1.8 billion through the platform each month and signing up between 6,000 and 8,000 new customers every day.

It claims nearly 2 million customers in total, of which 250,000 are daily active users, roughly 400,000 are weekly active users and 900,000 are monthly active users. The company says the target is 100 million customers in the next five years.

For a little more context, TransferWise has 3 million customers. I’m also told U.K. challenger bank Monzo now has 630,000 current account customers, of which 200,000 are daily active users, 360,000 are weekly active users and 500,000 are monthly active users. (In both Revolut and Monzo’s case, active users are defined as making at least one financial transaction.)

With the aim of persuading both consumers and businesses to ditch their traditional bank, Revolut offers most of the features you’d expect of a current account, including physical and virtual debit cards, direct debits and money transfer. Its “attack vector” (to borrow Monzo’s Tom Blomfield’s phrase) was originally low exchange fees when spending in a foreign currency, which undoubtedly fuelled much of the startup’s early growth and mindshare, but new features and products are being added at an increasingly fast pace.

Many of these are through partnerships with other fintech companies, and include travel insurance, phone insurance, credit, savings, and cryptocurrency. The latter looks like riding the hype cycle almost perfectly. Revolut is also applying for a European banking license, which would enable it to begin balance sheet lending, too.

To that end, Revolut says the Series C funding will be used to go beyond Europe and expand worldwide, starting with the U.S., Canada, Singapore, Hong Kong, and Australia this year. The company also expects to increase its workforce from 350 to around 800 employees in 2018.

Adtech company BuySellAds acquires Digg

It looks like Digg has found a new home: digital advertising company BuySellAds.

While neither company has put out an official announcement, BuySellAds CEO Todd Garland confirmed the acquisition to Fast Company, and a company spokesperson told me, “It’s true.”

Fast Company also reports that Digg’s technology team was not part of the deal.

Garland seems very aware that Digg readers may be skeptical about a company called BuySellAds, but he said, “Don’t pay attention to the name, people.” He also said, “Our plan with Digg is to not screw it up.”

The news aggregator was founded in 2004, then acquired by startup studio Betaworks in 2012. It took on additional funding from Gannett a couple of years ago.

Now it seems that last month’s shut down of Digg Reader was a sign that there were changes in the works.

Rocketrip raises $15 million to reward cost-saving employees

If your company lets you expense the nicest hotel when you travel, why wouldn’t you?

But what if you got to split the savings with your employer by selecting a less expensive hotel?

A New York-based startup called Rocketrip believes most employees will opt to save companies money if they are incentivized to do so. It’s built an enterprise platform that rewards employees with gift cards if they go under budget on travel and transportation.

After five years of signing up business clients like Twitter and Pandora, Rocketrip is raising $15 million in Series C funding led by GV (Google Ventures) to keep expanding. Existing investors Bessemer Venture Partners and Canaan Partners are also in the round.

Inspired by Google’s internal travel system, Rocketrip CEO Dan Ruch calls his solution a “behavioral change platform.” Employees “always optimize for self-preservation, self-interest,” and are likely to book a cheaper flight if it means a gift card at a place like Amazon, Bloomingdale’s or Home Depot, Ruch claims. He said that the average business trip booked by Rocketrip saves companies $208.

Ruch believes that Rocketrip has built a currency that motivates teams. He says some employees even gift Rocketrip points to congratulate colleagues on birthdays and promotions.

When it comes to enterprise platforms, Rocketrip is “one of those unique situations where everyone is really excited to use it,” said Canaan Partners’ Michael Gilroy, who holds a board seat.

Yet Rocketrip is not the only startup looking to help employees make money by cutting on costs. TripActions and TravelBank have also created similar businesses. 

Gilroy insists that “Rocketrip was first” and that he views the others a “validation of the model.”

Rocketrip hopes to someday expand beyond travel to incentivize healthcare choices, like quitting smoking. It also thinks companies will use Rocketrip points to reward employees for community service. “Any time we can motivate an employee,” there’s an opportunity for Rocketrip, Ruch believes.

Flipboard launches a new tech section

With recent changes, Flipboard has been placing a big emphasis on allowing readers to go deep on their interests. Now it’s adding even more features around one particular interest, in the Technology section of the Flipboard website and app.

“We want to make Flipboard definitive for tech insiders and enthusiasts,” said CEO Mike McCue .

This positions Flipboard as more of a direct competitor to a tech news aggregator like Techmeme, but with more curation from partners and from readers themselves.

The most immediately noticeable change is what the company describes as “newspaper-like, high-density layout.” Basically, it moves away from the image-heavy look that Flipboard is known for, towards a layout that places a bigger emphasis on headlines and text, designed for quick scanning.

While McCue said the new look is “really meant for the desktop,” Flipboard has also created a version for the mobile web, and the app will also vary between a high-density and low-density layout depending on the stories. (If it seems strange for Flipboard to be placing such a big emphasis on its web experience, remember that the company has also been shifting its focus away from its own native article formats towards the mobile web.)

Flipboard tech desktop

Regardless of which layout you’re seeing, the section will also have new content. Some of it will be curated by Flipboard publishers, with The Verge creating roundups for Gadgets News and Artificial Intelligence, the Wirecutter offering Deals of the Week and the team here at TechCrunch curating our latest Features.

“Flipboard has really become more of an ecosytem,” McCue said. “Publishers and curators are curating stories around all sorts of different topics. We want to provide access to that ecosystem on any platform, with or without the app.”

Teams can also create their own magazines, which are basically private collections of stories. So if you’re at a startup and want all of your colleagues to be up-to-date on the latest headlines about your industry and competitors, you can curate a magazine that’s only visible to them.

Flipboard will also be asking experts and influencers for book recommendations, starting with Wired Editor in Chief Nick Thompson’s roundup of “Five Books I’ve Recently Read About the Future.”

And all of this will be rounded up in a daily email, which will include the latest tech headlines as well as selections from the team magazine. On Saturday, the newsletter will focus on the book recommendations, with links to buy the books on Amazon.

McCue suggested that if all this new content is embraced by readers, we might see Flipboard start to pursue a similar strategy around other topics, with a focus on reaching professional readers. Next up: Advertising.

Drink-a-day startup Hooch adds a perk-filled premium membership plan

Hooch, the subscription startup that allows members to claim one free drink per day from hundreds of different bars and restaurants, is adding a new membership level called Hooch Black.

Signing up for Hooch Black will cost you significantly more than the regular subscription — instead of $9.99 per month, it’s $295 per year. And you don’t just get in automatically; you actually need to fill out an application.

But in exchange for that money and work, Hooch Black members get access to a variety of perks (on top of the standard drink-a-day option), including deals at more than 100,000 hotels worldwide — co-founder and CEO Lin Dai said that because they’re are only visible to members, Hooch gets access to lower “unpublished” prices that you won’t find elsewhere online, with discounts as high as 60 percent.

It also offers preferred reservations, discounts and free champagne at select restaurants. And there are other giveaways, too — in New York City, the launch offerings include Hamilton and Governor’s Ball tickets.

Dai suggested that Hooch has always been meant as an antidote to apps that “facilitate a couch economy” — instead of delivering stuff to your home, Hooch convinces you to go out to bars. Dai said Hooch Black “continues the concept” with all additional perks tied to real-world experiences. (There’s some couch-centric stuff too, like a $100 Postmates credit.)

Hooch Black

In addition, Hooch Black members will get access to what Dai described as an “concierge who can make travel arrangements and dining reservations for you.” (Those reservations don’t have to be with Hooch partners, by the way.) He compared the experience to an American Express concierge, but with the advantage that the communication is handled in the Hooch app: “No one wants to pick up the phone anymore.”

About that application: Dai said he wants to limit the initial membership to around 295 people in the three launch cities of New York, San Francisco and Los Angeles. He hopes to bring in more people eventually, but at first, having thousands of members would “dilute the experience,” particularly since some of the benefits (like access to celeb-hosted parties) don’t really scale.

At the same time, Dai said the application is “not about income or job title.” Instead, he sees the service as appealing to the same audience of “young professionals or millennial hustlers” as Hooch itself. So the application is focused on your bigger ambitions and “how hard you want to work to get there.”

Dai also noted that Hooch’s current membership is roughly even between men and women, something he’s hoping to continue with Hooch Black.

“We want to build a very inclusive community,” he added. “The primary criteria is, I would say, aspiration. We’re not just catering to a specific income level or race or gender.”

Pivotal CEO talks IPO and balancing life in Dell family of companies

Pivotal has kind of a strange role for a company. On one hand its part of the EMC federation companies that Dell acquired in 2016 for a cool $67 billion, but it’s also an independently operated entity within that broader Dell family of companies — and that has to be a fine line to walk.

Whatever the challenges, the company went public yesterday and joined VMware as a  separately traded company within Dell. CEO Rob Mee says the company took the step of IPOing because it wanted additional capital.

“I think we can definitely use the capital to invest in marketing and R&D. The wider technology ecosystem is moving quickly. It does take additional investment to keep up,” Mee told TechCrunch just a few hours after his company rang the bell at the New York Stock Exchange.

As for that relationship of being a Dell company, he said that Michael Dell let him know early on after the EMC acquisition that he understood the company’s position. “From the time Dell acquired EMC, Michael was clear with me: You run the company. I’m just here to help. Dell is our largest shareholder, but we run independently. There have been opportunities to test that [since the acquisition] and it has held true,” Mee said.

Mee says that independence is essential because Pivotal has to remain technology-agnostic and it can’t favor Dell products and services over that mission. “It’s necessary because our core product is a cloud-agnostic platform. Our core value proposition is independence from any provider — and Dell and VMware are infrastructure providers,” he said.

That said, Mee also can play both sides because he can build products and services that do align with Dell and VMware offerings. “Certainly the companies inside the Dell family are customers of ours. Michael Dell has encouraged the IT group to adopt our methods and they are doing so,” he said. They have also started working more closely with VMware, announcing a container partnership last year.

Photo: Ron Miller

Overall though he sees his company’s mission in much broader terms, doing nothing less than helping the world’s largest companies transform their organizations. “Our mission is to transform how the world builds software. We are focused on the largest organizations in the world. What is a tailwind for us is that the reality is these large companies are at a tipping point of adopting how they digitize and develop software for strategic advantage,” Mee said.

The stock closed up 5 percent last night, but Mee says this isn’t about a single day. “We do very much focus on the long term. We have been executing to a quarterly cadence and have behaved like a public company inside Pivotal [even before the IPO]. We know how to do that while keeping an eye on the long term,” he said.

In the NYC enterprise startup scene, security is job one

While most people probably would not think of New York as a hotbed for enterprise startups of any kind, it is actually quite active. When you stop to consider that the world’s biggest banks and financial services companies are located there, it would certainly make sense for security startups to concentrate on such a huge potential market — and it turns out, that’s the case.

According to Crunchbase, there are dozens of security startups based in the city with everything from biometrics and messaging security to identity, security scoring and graph-based analysis tools. Some established companies like Symphony, which was originally launched in the city (although it is now on the west coast), has raised almost $300 million. It was actually formed by a consortium of the world’s biggest financial services companies back in 2014 to create a secure unified messaging platform.

There is a reason such a broad-based ecosystem is based in a single place. The companies who want to discuss these kinds of solutions aren’t based in Silicon Valley. This isn’t typically a case of startups selling to other startups. It’s startups who have been established in New York because that’s where their primary customers are most likely to be.

In this article, we are looking at a few promising early-stage security startups based in Manhattan

Hypr: Decentralizing identity

Hypr is looking at decentralizing identity with the goal of making it much more difficult to steal credentials. As company co-founder and CEO George Avetisov puts it, the idea is to get rid of that credentials honeypot sitting on the servers at most large organizations, and moving the identity processing to the device.

Hypr lets organizations remove stored credentials from the logon process. Photo: Hypr

“The goal of these companies in moving to decentralized authentication is to isolate account breaches to one person,” Avetisov explained. When you get rid of that centralized store, and move identity to the devices, you no longer have to worry about an Equifax scenario because the only thing hackers can get is the credentials on a single device — and that’s not typically worth the time and effort.

At its core, Hypr is an SDK. Developers can tap into the technology in their mobile app or website to force the authorization to the device. This could be using the fingerprint sensor on a phone or a security key like a Yubikey. Secondary authentication could include taking a picture. Over time, customers can delete the centralized storage as they shift to the Hypr method.

The company has raised $15 million and has 35 employees based in New York City.

Uplevel Security: Making connections with graph data

Uplevel’s founder Liz Maida began her career at Akamai where she learned about the value of large data sets and correlating that data to events to help customers understand what was going on behind the scenes. She took those lessons with her when she launched Uplevel Security in 2014. She had a vision of using a graph database to help analysts with differing skill sets understand the underlying connections between events.

“Let’s build a system that allows for correlation between machine intelligence and human intelligence,” she said. If the analyst agrees or disagrees, that information gets fed back into the graph, and the system learns over time the security events that most concern a given organization.

“What is exciting about [our approach] is you get a new alert and build a mini graph, then merge that into the historical data, and based on the network topology, you can start to decide if it’s malicious or not,” she said.

Photo: Uplevel

The company hopes that by providing a graphical view of the security data, it can help all levels of security analysts figure out the nature of the problem, select a proper course of action, and further build the understanding and connections for future similar events.

Maida said they took their time creating all aspects of the product, making the front end attractive, the underlying graph database and machine learning algorithms as useful as possible and allowing companies to get up and running quickly. Making it “self serve” was a priority, partly because they wanted customers digging in quickly and partly with only 10 people, they didn’t have the staff to do a lot of hand holding.

Security Scorecard: Offering a way to measure security

The founders of Security Scorecard met while working at the NYC ecommerce site, Gilt. For a time ecommerce and adtech ruled the startup scene in New York, but in recent times enterprise startups have really started to come on. Part of the reason for that is many people started at these foundational startups and when they started their own companies, they were looking to solve the kinds of enterprise problems they had encountered along the way. In the case of Security Scorecard, it was how could a CISO reasonably measure how secure a company they were buying services from was.

Photo: Security Scorecard

“Companies were doing business with third-party partners. If one of those companies gets hacked, you lose. How do you vett the security of companies you do business with” company co-founder and CEO Aleksandr Yampolskiy asked when they were forming the company.

They created a scoring system based on publicly available information, which wouldn’t require the companies being evaluated to participate. Armed with this data, they could apply a letter grade from A-F. As a former CISO at Gilt, it was certainly a paint point he felt personally. They knew some companies did undertake serious vetting, but it was usually via a questionnaire.

Security Scorecard was offering a way to capture security signals in an automated way and see at a glance just how well their vendors were doing. It doesn’t stop with the simple letter grade though, allowing you to dig into the company’s strengths and weaknesses and see how they compare to other companies in their peer groups and how they have performed over time.

It also gives customers the ability to see how they compare to peers in their own industry and use the number to brag about their security position or conversely, they could use it to ask for more budget to improve it.

The company launched in 2013 and has raised over $62 million, according to Crunchbase. Today, they have 130 employees and 400 enterprise customers.

If you’re an enterprise security startup, you need to be where the biggest companies in the world do business. That’s in New York City, and that’s precisely why these three companies, and dozens of others have chosen to call it home.

Through luck and grit, Datadog is fusing the culture of developers and operations

There used to be two cultures in the enterprise around technology. On one side were software engineers, who built out the applications needed by employees to conduct the business of their companies. On the other side were sysadmins, who were territorially protective of their hardware domain — the servers, switches, and storage boxes needed to power all of that software. Many a great comedy routine has been made at the interface of those two cultures, but they remained divergent.

That is, until the cloud changed everything. Suddenly, there was increasing overlap in the skills required for software engineering and operations, as well as a greater need for collaboration between the two sides to effectively deploy applications. Yet, while these two halves eventually became one whole, the software monitoring tools used by them were often entirely separate.

New York City-based Datadog was designed to bring these two cultures together to create a more nimble and collaborative software and operations culture. Founded in 2010 by Olivier Pomel and Alexis Lê-Quôc, the product offers monitoring and analytics for cloud-based workflows, allowing ops team to track and analyze deployments and developers to instrument their applications. Pomel said that “the root of all of this collaboration is to make sure that everyone has the same understanding of the problem.”

The company has had dizzying success. Pomel declined to disclose precise numbers, but says the company had “north of $100 million” of recurring revenue in the past twelve months, and “we have been doubling that every year so far.” The company, headquartered in the New York Times Building in Times Square, employs more than 600 people across its various worldwide offices. The company has raised nearly $150 million of venture capital according to Crunchbase, and is perennially on banker’s short lists for strong IPO prospects.

The real story though is just how much luck and happenstance can help put wind in the sails of a company.

Pomel first met Lê-Quôc while an undergraduate in France. He was working on running the campus network, and helped to discover that Lê-Quôc had hacked the network. Lê-Quôc was eventually disconnected, and Pomel would migrate to IBM’s upstate New York offices after graduation. After IBM, he led technology at Wireless Generation, a K-12 startup, where he ran into Lê-Quôc again, who was heading up ops for the company. The two cultures of develops and ops was glaring at the startup, where “we had developers who hated operations” and there was much “finger-pointing.”

Putting aside any lingering grievances from their undergrad days, the two began to explore how they could ameliorate the cultural differences they witnessed between their respective teams. “Bringing dev and ops together is not a feature, it is core,” Pomel explained. At the same time, they noticed that companies were increasingly talking about building on Amazon Web Services, which in 2009, was still a relatively new concept. They incorporated Datadog in 2010 as a cloud-first monitoring solution, and launched general availability for the product in 2012.

Luck didn’t just bring the founders together twice, it also defined the currents of their market. Datadog was among the first cloud-native monitoring solutions, and the superlative success of cloud infrastructure in penetrating the enterprise the past few years has benefitted the company enormously. We had “exactly the right product at the right time,” Pomel said, and “a lot of it was luck.” He continued, “It’s healthy to recognize that not everything comes from your genius, because what works once doesn’t always work a second time.”

While startups have been a feature in New York for decades, enterprise infrastructure was in many ways in a dark age when the company launched, which made early fundraising difficult. “None of the West Coast investors were listening,” Pomel said, and “East Coast investors didn’t understand the infrastructure space well enough to take risks.” Even when he could get a West Coast VC to chat with him, they “thought it was a form of mental impairment to start an infrastructure startup in New York.”

Those fundraising difficulties ended up proving a boon for Datadog, because it forced the company to connect with customers much earlier and more often than it might have otherwise. Pomel said, “it forced us to spend all of our time with customers and people who were related to the problem” and ultimately, “it grounded us in the customer problem.” Pomel believes that the company’s early DNA of deeply listening to customers has allowed it to continue to outcompete its rivals on the West Coast.

More success is likely to come as companies continue to move their infrastructure onto the cloud. Datadog used to have a roughly even mix of private and public cloud business, and now the balance is moving increasingly toward the public side. Even large financial institutions, which have been reticent in transitioning their infrastructures, have now started to aggressively embrace cloud as the future of computing in the industry, according to Pomel.

Datadog intends to continue to add new modules to its core monitoring toolkit and expand its team. As the company has grown, so has the need to put in place more processes as parts of the company break. Quoting his co-founder, Pomel said the message to employees is “don’t mind the rattling sound — it is a spaceship, not an airliner” and “things are going to break and change, and it is normal.”

Much as Datadog has bridged the gap between developers and ops, Pomel hopes to continue to give back to the New York startup ecosystem by bridging the gap between technical startups and venture capital. He has made a series of angel investments into local emerging enterprise and data startups, including Generable, Seva, and Windmill. Hard work and a lot of luck is propelling Datadog into the top echelon of enterprise startups, pulling New York along with it.

Full-Metal Packet is hosting the future of cloud infrastructure

Cloud computing has been a revolution for the data center. Rather than investing in expensive hardware and managing a data center directly, companies are relying on public cloud providers like AWS, Google Cloud, and Microsoft Azure to provide general-purpose and high-availability compute, storage, and networking resources in a highly flexible way.

Yet as workflows have moved to the cloud, companies are increasingly realizing that those abstracted resources can be enormously expensive compared to the hardware they used to own. Few companies want to go back to managing hardware directly themselves, but they also yearn to have the price-to-performance level they used to enjoy. Plus, they want to take advantage of a whole new ecosystem of customized and specialized hardware to process unique workflows — think Tensor Processing Units for machine learning applications.

That’s where Packet comes in. The New York City-based startup’s platform offers a highly-customizable infrastructure for running bare metal in the cloud. Rather than sharing an instance with other users, Packet’s customers “own” the hardware they select, so they can use all the resources of that hardware.

Even more interesting is that Packet will also deploy custom hardware to its data centers, which currently number eighteen around the world. So, for instance, if you want to deploy a quantum computing box redundantly in half of those centers, Packet will handle the logistics of installing those boxes, setting them up, and managing that infrastructure for you.

The company was founded in 2014 by Zac Smith, Jacob Smith, and Aaron Welch, and it has raised a total of $12 million in venture capital financing according to Crunchbase, with its last round led by Softbank. “I took the usual path, I went to Juilliard,” Zac Smith, who is CEO, said to me at his office, which overlooks the World Trade Center in downtown Manhattan. Double bass was a first love, but he found his way eventually into internet hosting, working as COO of New York-based Voxel.

At Voxel, Smith said that he grew up in hosting just as the cloud started taking off. “We saw this change in the user from essentially a sysadmin who cared about Tom’s Hardware, to a developer who had never opened a computer but who was suddenly orchestrating infrastructure,” he said.

Innovation is the lifeblood of developers, yet, public clouds were increasingly abstracting away any details of the underlying infrastructure from developers. Smith explained that “infrastructure was becoming increasingly proprietary, the land of few companies.” While he once thought about leaving the hosting world post-Voxel, he and his co-founders saw an opportunity to rethink cloud infrastructure from the metal up.

“Our customer is a millennial developer, 32 years old, and they have never opened an ATX case, and how could you possibly give them IT in the same way,” Smith asked. The idea of Packet was to bring back choice in infrastructure to these developers, while abstracting away the actual data center logistics that none of them wanted to work on. “You can choose your own opinion — we are hardware independent,” he said.

Giving developers more bare metal options is an interesting proposition, but it is Packet’s long-term vision that I think is most striking. In short, the company wants to completely change the model of hardware development worldwide.

VCs are increasingly investing in specialized chips and memory to handle unique processing loads, from machine learning to quantum computing applications. In some cases, these chips can process their workloads exponentially faster compared to general purpose chips, which at scale can save companies millions of dollars.

Packet’s mission is to encourage that ecosystem by essentially becoming a marketplace, connecting original equipment manufacturers with end-user developers. “We use the WeWork model a lot,” Smith said. What he means is that Packet allows you to rent space in its global network of data centers and handle all the logistics of installing and monitoring hardware boxes, much as WeWork allows companies to rent real estate while it handles the minutia like resetting the coffee filter.

In this vision, Packet would create more discerning and diverse buyers, allowing manufacturers to start targeting more specialized niches. Gone are the generic x86 processors from Intel driving nearly all cloud purchases, and in their place could be dozens of new hardware vendors who can build up their brands among developers and own segments of the compute and storage workload.

In this way, developers can hack their infrastructure much as an earlier generation may have tricked out their personal computer. They can now test new hardware more easily, and when they find a particular piece of hardware they like, they can get it running in the cloud in short order. Packet becomes not just the infrastructure operator — but the channel connecting buyers and sellers.

That’s Packet’s big vision. Realizing it will require that hardware manufacturers increasingly build differentiated chips. More importantly, companies will have to have unique workflows, be at a scale where optimizing those workflows is imperative, and realize that they can match those workflows to specific hardware to maximize their cost performance.

That may sound like a tall order, but Packet’s dream is to create exactly that kind of marketplace. If successful, it could transform how hardware and cloud vendors work together and ultimately, the innovation of any 32-year-old millennial developer who doesn’t like plugging a box in, but wants to plug in to innovation.

BigID lands in the right place at the right time with GDPR

Every startup needs a little skill and a little luck. BigID, a NYC-based data governance solution has been blessed with both. The company, which helps customers identify sensitive data in big data stores, launched at just about the same time that the EU announced the GDPR data privacy regulations. Today, the company is having trouble keeping up with the business.

While you can’t discount that timing element, you have to have a product that actually solves a problem and BigID appears to meet that criteria. “This how the market is changing by having and demanding more technology-based controls over how data is being used,” company CEO and co-founder Dimitri Sirota told TechCrunch.

Sirota’s company enables customers to identify the most sensitive data from among vast stores of data. In fact, he says some customers have hundreds of millions of users, but their unique advantage is having built the solution more recently. That provides a modern architecture that can scale to meet these big data requirements, while identifying the data that requires your attention in a way that legacy systems just aren’t prepared to do.

“When we first started talking about this [in 2016] people didn’t grok it. They didn’t understand why you would need a privacy-centric approach. Even after 2016 when GDPR passed, most people didn’t see this. [Today] we are seeing a secular change. The assets they collect are valuable, but also incredibly toxic,” he said. It is the responsibility of the data owner to identify and protect the personal data under their purview under the GDPR rules, and that creates a data double-edged sword because you don’t want to be fined for failing to comply.

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GDPR is a set of data privacy regulations that are set to take effect in the European Union at the end of May. Companies have to comply with these rules or could face stiff fines. The thing is GDPR could be just the beginning. The company is seeing similar data privacy regulations in Canada, Australia, China and Japan. Something akin go this could also be coming to the United States after Facebook CEO, Mark Zuckerberg appeared before Congress earlier this month. At the very least we could see state-level privacy laws in the US, Sirota said.

Sirota says there are challenges getting funded as a NYC startup because there hadn’t been a strong big enterprise ecosystem in place until recently, but that’s changing. “Starting an enterprise company in New York is challenging. Ed Sim from Boldstart [A New York City early stage VC firm that invests in enterprise startups] has helped educate through investment and partnerships. More challenging, but it’s reaching a new level now,” he said.

The company launched in 2016 and has raised $16.1 million to date. It scored the bulk of that in a $14 million round at the end of January. Just this week at the RSAC Sandbox competition at the RSA Conference in San Francisco, BigID was named the Most Innovative Startup in a big recognition of the work they are doing around GDPR.