PayPal cofounder Max Levchin joins $13M Series A for consumer-data tech firm Ethyca

June 11, 2020, 5:00 AM UTC

For companies that collect consumer data—which can be anything from an email address to web browsing history—the stakes are increasingly high when it comes to managing it.

A raft of new consumer privacy rules are going into force in the U.S. and around the world, and can pose stiff financial and operational burdens on companies that must comply with them.

A startup called Ethyca, however, believes it has a solution: software that identifies sensitive data and automates the process of managing it. On Thursday, the New York–based firm announced it had raised a $13.5 million Series A round from PayPal cofounder Max Levchin and other investors.

Ethyca cofounder Cillian Kieran told Fortune that his clients include Slice Pizza, luggage maker Away, and several large tech companies. He said the service is superior to other systems because it requires firms to employ no manual decision-making process. Ethyca typically charges between $750 and $1,500 a month but also offers a free version for small companies, and more expensive tools for very large ones.

Following the introduction of Europe’s landmark privacy legislation, the General Data Protection Regulation (GDPR), numerous other countries, including Canada and Brazil, have introduced measures of their own. And in the U.S., California’s governor announced last week he intends to begin enforcing the state’s new privacy law, the California Consumer Privacy Act (CCPA), as soon as July.

Complying with these laws can force companies to expend considerable time and expense mapping their data and responding to customer requests, and can lead to fines if they fail to do so. Ethyca is seeking to provide a shortcut with its service, which it touts as a way to “scrap the spreadsheets” when it comes to the GDPR and CCPA.

The arrival of services like Ethyca, whose advisers include a top technology official from the Obama administration, may also mark a shift in the way many companies conceive of data in the first place. According to Kieran, a self-described computer science and physics dropout, the tech industry has a poor track record when it comes to privacy, in part because of an ethos that prizes speed over caution.

“We don’t do ethics very well in computer science,” he says. “But software has become a form of civil engineering, and imagine if an engineer wore a T-shirt that said ‘Move things and break things’ while fixing a bridge.”

Kieran suggests that this attitude is changing, however, as more firms embrace the idea of “privacy by design”—an ideal long espoused by consumer advocates, but often ignored by companies eager to profit from data.

Ethyca is not profitable at the moment, but Kieran says the 18-person company expects to be soon, and that it’s growing at 250% a month. Other investors in its Series A round include IA Ventures and tech entrepreneur Scott Belsky.

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