The market for corporate data privacy products is heating up, with Skyflow announcing a $45 million Series B this morning, just a day after TripleBlind announced a $24 million round.
Skyflow, which TechCrunch has covered since its early-2020 seed financing, offers an API-delivered service that stores personally identifying information (PII), among other sensitive data for customers.
When we last discussed Skyflow, the company had just closed its $17.5 million Series A, back in late 2020. It has since expanded its product mix to include a fintech-data-focused service to help financial technology companies store credit card and other sensitive information. The company offers variations of its service for healthcare companies, as well.
Insight Partners led the new financing event, which included money from venture arm associated with Santander. The startup has now raised $70 million, it said in a release.
Skyflow, like many API-delivered companies, wants to take a hard problem and abstract it into a single developer hook. Or, more simply, Skyflow wants to handle all the difficult privacy, encryption and data issues of storing PII and other forms of potentially radioactive data for its customers. (Skyflow uses a zero-trust vault built with polymorphic encryption, in case you are curious.)
In an interview with TechCrunch, Skyflow co-founder and CEO Anshu Sharma emphasized that his company is working to ensure that it can handle data residency requirements and other related regulatory matters so that companies around the world can use its service without attracting the ire of any particular government.
The startup is seeing some success with its model thus far, claiming “8x growth” in the last nine months. From what base — and where that growth scales the company’s revenue run rate to — was not clear. Series B is roughly the point after which we demand harder metrics from startups; this will be Skyflow’s last round where we’ll chat about it without harder figures.
The startup has around 65 staff today and is looking to roughly double that by the end of 2022.
Skyflow didn’t need to raise new funds when it closed its Series B. It has been less than a year since it raised its last round, after all. The company had capital still on its books from that prior investment — around $11 million, per Sharma. That data point matters because it implies that the company raised when it wasn’t forced to by a dwindling bank account, likely giving it leverage in its fundraising.
The company declined to share a valuation on the record, but given the $45 million raise, we expect that the company is now comfortably into the nine-figure range, though where it lands on that interval is not clear. PitchBook data indicates that Skyflow was worth just under $100 million before it raised this round, so a valuation of $300 million to $500 million feels range-correct for its Series B, if we were the guessing type.
The issue of data privacy is not small. TripleBlind and Skyflow are not the only companies working on the matter, though they both have healthcare-facing products for sale. Certainly, with its new raise, Skyflow has the cash to make its case that it has built the right product for its target markets and thus will not find itself eventually subsumed into some larger technology shop.
Thinking one level up from the startups we’re discussing, companies are only accreting more data to themselves as time passes. If that weren’t the case, we wouldn’t see Databricks scaling its revenues and valuation as rapidly as it is. More data, more risk. More risk, more demand for privacy-focused software. In secular terms, startups focused on solving the data storage and security issues are running downhill.
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