It’s better to ask for permission than forgiveness.
That’s the philosophy behind Caden, a privacy startup that launched on Thursday with $3.4 million in pre-seed funding from a roster of well-known investors, including Yahoo Co-Founder Jerry Yang, MediaLink Vice Chairman Wenda Harris Millard and Barry Sternlicht, founder of Starwood Capital.
Caden’s founder, John Roa, sold his previous startup – innovation and design consultancy ÄKTA – to Salesforce in 2015 for an undisclosed sum. Roa stayed at Salesforce for around nine months but realized rather quickly that being a serial entrepreneur inside a giant tech company “wasn’t the greatest landing place for me,” he said.
Around that time, there was a lot of chatter about privacy and the future of identity and data online. President Obama had just failed to push through a federal privacy law, but the General Data Protection Regulation (GDPR) in Europe was on the cusp of being adopted (although it wouldn’t go into effect until 2018).
“It was clear that rules and regs around data were changing,” said Roa, who wrote a business plan for Caden in 2015 centered on the notion of giving consumers control over the data they share directly with brands. At the time, the term “zero-party data” hadn’t yet been popularized, but that was the idea, Roa said.
It was a bit premature for a consumer-facing platform to manage data rights and usage, though, so Roa put the plan aside and went on a four-year sabbatical spent mostly on the island of Mykonos in Greece.
“When I came back, I looked at my thesis with fresh eyes and realized that this wonky idea was now viable,” Roa said.
Roughly 70% of Caden’s funding will go toward engineering its two flagship products, which are still in the works.
The first, called VAULT, will serve as an on-device data wallet or bank account of sorts that people can use to store and organize their personal information.
The second product, LINK, will be a two-way API that consumers can use to gather their data into the vault, then decide which brands have access to it and for what purposes. Users will be compensated in exchange for sharing their data with brands in an encrypted form and without having to relinquish their ownership of the data.
For example, a user would be able to give a sneaker brand access to their information in exchange for a discount, then click to end the data exchange once that value exchange is complete.
“When all of the data is in one place and normalized, it can become more powerful for users and brands versus existing in multiple different silos,” Roa said. “You can have thousands of data scientists working for you, but actually know very little about your customers compared to just asking them – as in, tell us what you want us to do with your data so we can serve you better in a way that also protects your privacy.”
Caden, which has 18 employees and growing, is one of an expanding crop of privacy tech startups getting funded right now.
Just last month, another startup, Qonsent, helmed and founded by former WarnerMedia and Turner executive Jesse Redniss, closed a $5 million seed round in mid-December to build an app that helps consumers more easily manage and control their personal information.