Dataguard: Fresh money for IT security start-up

Thomas Regier (left) and Kivanc Semen

The founders of Dataguard are longtime friends and business partners.

(Photo: DataGuard)

Dusseldorf For many managers, data protection is like a visit to the dentist: unavoidable, but annoying. The start-up Dataguard promises, figuratively, to alleviate the pain. It helps organizations to organize processes related to the General Data Protection Regulation (GDPR) and other regulations in a legally secure manner. According to its own statements, it has 3,000 customers in 50 countries, most of whom are small and medium-sized companies.

With a second round of financing, the so-called Series B, Dataguard now wants to expand the business: The start-up will receive 61 million euros, the majority of MorganStanley Expansion Capital and One Peak. Early-stage investors are also involved.

On the one hand, the founding team from Munich is planning to expand the product portfolio. "We started with data protection, but from the outset our vision was to also manage information security and compliance via our platform," says Co-CEO Thomas Regier.

On the other hand, expansion into new markets is on the agenda. "Many countries model their laws according to the GDPR - our platform should also become an export hit," says the founder.

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The focus is on the European Union and the USA. The company does not comment on the valuation, which should be in the lower three-digit million range given conditions similar to those in the industry.

Right idea at the right time

Thomas Regier and his partner Kivanç Semen founded the start-up in 2018. The two friends, who have known each other for 20 years, got the perfect time: the General Data Protection Regulation was just beginning to take effect - and many companies broke because of the complex set of rules and the high range of penalties.

This has now subsided, but widespread uncertainty remains, at least among the self-employed, start-ups and medium-sized companies. Twelve percent of companies with up to 500 employees have still not implemented the GDPR, according to a survey by the Bitkom emerges. In companies with up to 100 employees it is even 33 percent.

While corporations can set up their own teams of lawyers and programmers, smaller companies lack the know-how and personnel to take care of themselves. Or money to hire a specialized law firm.

The offer contains two components. On the one hand, there is specialist advice, for example if a medium-sized company has become the victim of a hacker attack. Some of the almost 250 employees are lawyers.

Head of department without a state examination

On the other hand, the cloud platform. This is intended to support customers in designing, monitoring and documenting their business processes in compliance with data protection regulations. For example, if a company plans to send emails as part of a marketing campaign, it will be alerted to potential risks. According to the claim, a managing director or a department head without a state examination in law should also understand this.

>> Read here: US tech giants preparing lawsuits against stricter rules in the EU

It is not a one-time test, but a fixed part of the daily work, emphasizes Regier: "The customer's infrastructure and processes are constantly changing."

Dataguard offers a subscription model. The start-up does not publish how much this brings in, it only points out that it has tripled its customer base within two years. According to estimates in industry circles, the recurring annual turnover is in the low double-digit million range. Among the largest customers CanonHyatt and the UNICEF.

It should not stop with data protection

Reger does not see any direct competitors. The US company One Trust, which took over the German start-up Planetly a few months ago, offers a similar solution. However, according to the founder, it is aimed at larger organizations.

It should not stop with data protection. Dataguard wants to extend the proven principle to information security and compliance. There is a lot of overlap here: A security gap in IT can become a data protection problem - and the management is liable for this.

It is precisely this ambition that appeals to financiers: "In the next ten years, companies worldwide will invest tens of billions in compliance and security in order to become and remain trustworthy partners," explains One Peak. Dataguard helped create a new service category in this area.

More: Cyber ​​attack on Revolut: Hackers gain access to the data of 50,000 users.

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