Early-stage fundraising is starting to look more and more like later-stage growth funding, for better or worse.
OneTrust, a data privacy and compliance startup, announced on Thursday that it raised $200 million in Series A funding from Insight Partners. The round valued the three-year-old company, which was completely bootstrapped by its founding team before Thursday, at $1.3 billion.
“You look at the size of the round and the valuation and it makes sense to ask [if it makes sense],” Richard Wells, managing director at Insight Partners, told Business Insider. “But the numbers make a lot of sense. It’s not just an idea that we are lobbing $200 million into.”
The deal ties OneTrust with device management software maker AirWatch for the largest Series A funding round in recent history, according to Crunchbase. Notably, VMware acquired AirWatch for $1.54 billion, less than a year after it raised that mammoth round.
Perhaps not coincidentally, the OneTrust executive team is largely comprised of early AirWatch employees— OneTrust co-chairman Alan Dabbiere was also a founder at AirWatch, while CEO Kabir Barday was a product manager.
Another thing the two companies have in common: They were both bootstrapped, meaning the founders used their own money to finance the company until it got off the ground. This $200 million round is the first investment that OneTrust has ever raised.
“I’ve been blessed to see lightning strike twice,” Dabbiere told Business Insider. “Doing this the second time is a lot easier, the analogy I like to use is it’s like watching a murder mystery movie a second time. When you know the ending, you can focus on picking up smaller things to think about.”
Read More:This Brazilian immigrant CEO thinks that Silicon Valley investors need to do more to help customers outside America, even if their income is lower
OneTrust offers enterprise software to help companies comply with the patchwork of data privacy regulations across the world.
According to Dabbiere, OneTrust serves several of the top companies in everything from retail to banking and car manufacturing. He pointed to expanding privacy regulations in the United States, like California’s new CCPA law, as the biggest source of growth for OneTrust. More and more companies need to think about data privacy, he said, as consumer demand means that the world continues to move online.
“While the internet was invasive in our lives, the smartphone elevated that invasiveness,” Dabbiere said.
Wells believes that data privacy is already a billion-dollar business. He just wanted to fund the market leader, he said, and wasn’t concerned about how such a substantial early round would be received by other investors.
“Look, larger rounds have always been a big piece of our business,” Wells said. “It gets caught up in this broader landscape, but we’ve been doing this for a long time and are going to continue doing it.”
Part of the selling point, Wells said, was in knowing the OneTrust team from their AirWatch days.
“If I put out a glass of water and take a pitcher of water and dump it out, I’ll fill the glass but I’ll also make a mess,” Wells said. “That’s essentially what’s happening in growth tech, and that’s just not these [OneTrust] folks’ style. They got to this place by spending their own money.”
Dabbiere and OneTrust CEO Kabir Barday confirmed that they bootstrapped the business in the years since Barday left AirWatch to found OneTrust.
“We didn’t need to take capital. When you take that kind of capital, you de-risk a lot of things in the business,” Dabbiere said. “Companies still want to ask, ‘are you viable?’ and when a company like Insight makes a commitment like this it takes that question off the table.”
The eye-popping growth and speedy trajectory is sustainable and will actually accelerate, according to Barday. He told Business Insider that OneTrust is planning to add tools outside of compliance and data privacy, acting similarly to a resource manager for cross-team collaboration for customer data.
“Just like you need to invest in CRM like Salesforce, teams need to invest in a privacy platform. It’s in the fabric of the company and where we will keep seeing tremendous growth.”