We are excited to announce our collaboration with Protecto, whose Data Posture Intelligence addresses privacy and data protection pain points by offering an intelligent, auto-pilot solution with minimal manual effort required. It simplifies otherwise tedious compliance consisting of complex regulations and policies and frees up time and resources for Data Teams.
The team is divided between Cupertino and Bangalore and features a formidable lineup of leaders with impressive expertise. Amar Kangaraj is a second-time entrepreneur and the CEO. Baskaran Alagarsamy, who previously led Data Teams at Apple is the CTO.
1. Market Forces Shaping Protecto's Path
The privacy and compliance technology sector is currently experiencing a remarkable surge, propelled by the following significant tailwinds:
First and foremost, the stricter-than-ever privacy regulations, exemplified by GDPR, CCPA, and HIPAA, have become driving forces. In response to these regulatory mandates, organizations are compelled to reevaluate and enhance their methods for handling, storing, and safeguarding personally identifiable information (PII).
The second driver for this growth is the stiff financial penalties imposed for non-compliance. Companies can face substantial financial loss for failing to adhere to these stringent regulations. For instance, GDPR violations can result in penalties of up to €20 million or 4% of annual revenue.1 Additionally, the average cost of a data breach, factoring in lost business, has surged to $4.35 million, marking a 12.7% increase from the $3.86 million figure recorded in 2020.2
Moreover, the complexity of this landscape is compounded by the emergence of privacy regulations in multiple jurisdictions, posing formidable challenges for companies aiming to maintain global compliance and secure sensitive information. Navigating this intricate regulatory web requires advanced solutions that can effectively adapt to varying legal frameworks from around the world.
Lastly, the heightened awareness of the value of personal and sensitive data is reshaping consumer and business behaviour. A survey conducted by McKinsey underscores this shift, with 87% of respondents indicating they would not engage with a company if they harboured security concerns. Furthermore, a staggering 71% stated they would sever ties with a company that mishandled their sensitive data without consent.3 This signifies a sea change in expectations regarding data protection, compelling organizations to prioritize robust data privacy measures.
2. Protecto’s Offerings
A. Privacy Intelligence
Protecto's Data Posture Intelligence offers a solution for enhancing Privacy Intelligence in enterprise data management. It provides the following advantages:
Visibility into Data: The solution provides visibility into the data being handled by an enterprise, including who has access to it and how it is being used.
Identifying Risks and Gaps: The solution finds and prioritizes risks and gaps across data, users, and activities, and delivers continuous auditing.
Automating Compliance: The solution automates compliance steps, freeing up resources and reducing the risk of non-compliance.
Recommending Actions: Protecto's solution recommends actions to reduce risks, such as removing stale data, reducing over-exposed data, and reducing excess access. These recommendations help to improve data security, reduce the risk of breaches, and stay up to date with various compliance requirements.
B. Privacy Vault
Protecto.ai's Privacy Vault is the answer that a lot of enterprise companies looking for to ensure data privacy and security when trying to use 3rd party systems, including 3rd Party LLMs. Failure to do so could result in a breach of sensitive information as it did for Samsung in May this year.4
Privacy Vault uses Data Tokenisation to mask personally identifiable information (PII) in customer datasets with unique tokens, preserving data integrity. For instance, through the usage of advanced AI, it identifies and masks sensitive chat data, preventing confidential information exposure on AI chat platforms. Data integrity is maintained, enabling interaction with LLMs without revealing sensitive details.
Additionally, it offers comprehensive insights into data flow within AI conversations, empowering users with insightful analytics for better control.
3. The Business ROI of Using Protecto
A. Monitoring Data Posture and Reducing Compliance Efforts
Protecto's solution is a SaaS platform with no code setup. It comes with pre-built connectors to various data sources and is non-intrusive, making implementation easy and straightforward. It operates agentless, meaning there is no need to install any agents on the customer's infrastructure. With these features, customers can start monitoring their data posture in under an hour. Reduced audit/compliance efforts by 9-12 months and hundreds of thousands of dollars.
B. Reducing Risks
With Protecto, customers can see results in just one day. In 24 hours or less, they can identify and prioritize risks and vulnerabilities, discover overexposed sensitive data, audit user permissions and activities, and generate compliance reports. This process is fast and efficient, even for large amounts of data. In financial terms, this means reduced data protection risks (~$100M+) and a reduction in 20-30% of data, resulting in savings of $100K per year in infrastructure costs.
4. The Expansive TAM
The global cloud security posture management market, which was valued at $4 billion in 2021, is on a trajectory for significant growth. Projections indicate it will surge to a substantial $15.2 billion by 2031, with a notable CAGR of 14.5% from 2022 to 2031.5
When we conduct a bottom-up analysis, considering the vast landscape of technology companies in the USA, totalling approximately 585,000, we uncover an even more remarkable perspective.6 Every tech company would require some level of data protection, however, even if we focus on the top 5% of these companies as potential clients for Protecto, we unveil a billion-dollar opportunity that beckons.
5. Meet the Team
Baskaran, the brains behind the tech, previously led Data Teams at Apple, personally dealing with enterprise-scale data privacy and security challenges.
Amar, the CEO and a successful second-time founder scaled his previous B2B company to $10 million in ARR before a successful exit.
Together, Baskaran and Amar form a dynamic partnership, bringing to the table a complementary blend of experience and skills that sets the startup on a trajectory toward achieving substantial milestones in its growth journey.
6. FortyTwo’s Investment Focus
We at FortyTwo purely focus on B2B SaaS and enterprise Tech. Our investment in Protecto reflects our strong belief in the data infrastructure space. So, if you are working in data infrastructure or related domains, feel free to reach out to us at deepthought@fortytwo.vc.
https://www.eqs.com/compliance-blog/biggest-gdpr-fines/
https://www.ibm.com/reports/data-breach
https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/the-consumer-data-opportunity-and-the-privacy-imperative
https://www.forbes.com/sites/siladityaray/2023/05/02/samsung-bans-chatgpt-and-other-chatbots-for-employees-after-sensitive-code-leak/?sh=4d5986ca6078
https://www.alliedmarketresearch.com/cloud-security-posture-management-market-A31310
https://earthweb.com/how-many-technology-companies-in-the-us/