Osano, a data privacy management platform, nabs $25M

Osano, an Austin, Texas-based startup developing a platform to help companies manage their data privacy, today announced that it raised $25 million in a Series B funding round led by Baird Capital with First Ascent Ventures, Jump Capital, LiveOak, NextCoast and TDF.

In an interview with TechCrunch, CEO Arlo Gilbert said that the cash will be put toward expanding Osano's engineering, product development and sales departments, investing more in R&D and building a channel program.

"All of this will help serve Osano’s goals of expanding its product suite, continuing to service its customers’ needs and maintaining its high customer service satisfaction," Gilbert told me via email. "With this funding, Osano will scale the team to deliver on the company’s mission and goal of simplifying privacy compliance for its customers as they continue to grow in their privacy program maturity -- and becoming the leading data privacy platform."

In light of high-profile hacks and data breaches, as well as regulations like GDPR and the California Consumer Privacy Act, privacy awareness and investment continues to grow among organizations. The risk's certainly growing. Companies are now spending an average of $11.45 million per year in remediation costs related to insider data breaches, per Proofpoint. And among organizations who must comply with the GDPR, 38% reported a breach in 2019 -- compared to just 16% in 2018.

It's not surprising, then, that 40% of organizations plan to invest in additional security service spending, according to a 2020 Gartner survey. It'll likely be well worth it. In its Data Privacy Benchmark study, Cisco found that more than 40% of organizations are seeing benefits at least twice that of their privacy spend.

Osano aims to be companies' go-to solution for privacy management.

Gilbert co-founded Osano in 2018 with Scott Hertel, inspired by Gilbert's observation that organizations were misunderstanding data privacy. From inception, Osano offered products dedicated to data privacy, but later grew into a platform and suite of products to build, automate and scale their privacy programs.

"Osano is a data privacy platform helping organizations build, manage and scale their privacy programs from the ground up," Gilbert explained. "Osano's global team of privacy experts continuously monitors the privacy landscape, from new laws to data protection authority rulings, to ensure the platform is always up-to-date."

Osano can be integrated with any website, Android app or iOS app to add data controls. The platform, which uses AI to help firms locate and classify the storage of protected information among their various data stores, offers an array of privacy-centered data management tools, including tools for cookie consent (the act of giving users the choice of whether to allow data-collecting cookies) and subject rights (rights granted to users in relation to personal data or information processed about them).

Osano also provides a dedicated team of attorneys via its "regulatory guidance" feature. Customers get an updated database of key laws, the reasons why they matter and what their response should be in order to stay compliant.

In addition, organizations using Osano are granted access to a framework and guide designed to Strengthen their privacy comprehension, as well as identify gaps and -- with any luck -- elevate their privacy programs.

"Unlike others in the industry, Osano has built its own products and is concentrated only on privacy," Gilbert said. "Privacy regulations are complex and constantly evolving. Keeping pace with the latest regulatory developments can be a challenge and takes an immense amount of specialized expertise and effort -- which Osano delivers."

Gilbert claims that Osano, which has raised a total of $44.4 million in capital to date, has more than 40,000 users on the platform and is delivering over 1 billion cookie consent banners every month. He credits the startup's laser focus on privacy with its success.

"In their market, they go head to head with competitors that commit to providing enterprise data privacy software solutions -- such as DataGrail and Securiti," Gilbert said. "While some in the space have built their platform offerings through acquisition or bled into other industries like security and environmental, social and governance, Osano has committed to data privacy; they don’t stray beyond their expertise. And we're an industry-agnostic solution, serving many different industries, including, but not limited to, financial services, e-commerce, healthcare, media, retail and consumer-packaged goods."

One thing's for sure: Osano occupies a large and growing market. Markets and Markets estimates that the privacy management software segment will grow from $2.7 million in 2023 to $15.2 billion by 2028, an impressive climb within the span of just a few years. No doubt, newly enacted privacy laws -- and increasing consumer awareness of those new laws -- is at least partially to thank.

Cisco Gains After CEO Points to Headway in AI and Security

(Bloomberg) -- Cisco Systems Inc., the largest maker of computer networking equipment, rose the most in six months after the company outlined headway in AI and security technology, helping ease concerns about a sales slowdown.

Most Read from Bloomberg

Cisco, which reported fiscal fourth-quarter results Wednesday, is coming off a spike in demand fueled by the end of pandemic-era supply shortages. Though growth is now decelerating sharply from last year’s surge, Chief Executive Officer Chuck Robbins pointed to a bright future where revenue is more consistent — thanks to subscription-based services — and Cisco capitalizes on the transition to AI-focused data centers.

The company said it has already recorded $500 million in orders for AI products, which it offers to so-called hyperscaler customers — large cloud-computing service providers.

“Cisco is committed to helping their customers navigate this transition in a trusted and responsible way to deliver on the full promise of this technology, and they are well positioned to win,” Robbins said on a conference call with analysts.

That outlook helped send the stock up as much as 5.4% in New York on Thursday morning, the most since February, following an initial decline when the quarterly report was released. The company also said it plans to keep increasing share repurchases and dividends.

Cisco shares had closed at $52.96 in regular trading Wednesday, leaving it up 11% this year.

In the period ending in October, sales will rise to about $14.6 billion. That’s in line with analysts’ estimates of $14.57 billion. Excluding certain items, profit will be roughly $1.03 a share, compared with an average estimate of 99 cents.

Story continues

Cisco’s gross margin has been a bright spot. It’s expected to be 65% to 66% this quarter on an adjusted basis, the company said. Analysts estimated 64.7%.

Sales will be $57 billion to $58.2 billion in fiscal 2024, the company said. That compares with the $58.3 billion analysts had estimated on average, according to a Bloomberg survey.

The growth forecast pales in comparison with the 11% jump in Cisco’s just-ended fiscal year. The company had seen orders stack up during a prolonged period of component shortages. With those parts now available, Cisco has been able to ship hardware — and sell associated software — to meet pent-up demand. But that surge is fading.

In Cisco’s fiscal fourth quarter, which ended July 29, revenue rose 16% to $15.2 billion. Profit, minus some items, was $1.14 a share. That compares with estimates of about $15.1 billion in revenue and $1.06 a share in earnings.

Robbins has been working for years to remake his company as a provider of networking services and software. His management team points to the amount of recurring revenue that it’s building up as an indication that the transition is succeeding.

But Cisco still mostly relies on selling expensive pieces of network equipment — with proprietary software — and that makes it hard to avoid the swings in demand from corporate customers. The company’s sales increase of 11% last year is expected to downshift to just 2% this year.

In a common pattern with tech companies, AI was a major syllabu of Cisco’s conference call. Cloud service providers have been racing to add computing power to handle services such as OpenAI’s ChatGPT and Google Bard.

Cisco will have a role in that lucrative market, Robbins said, without giving a specific forecast on how big it will be.

“This is a huge opportunity for Cisco,” Robbins said on the call. “We are laser-focused on leading and winning in this space.”

(Updates with share trading)

Most Read from Bloomberg Businessweek

©2023 Bloomberg L.P.