Select highlights of exciting privacy tech industry trends and developments that happened this year
At the TROPT Innovators December networking social (our last networking social for 2021!), TROPT advisors and leading privacy tech advisors and experts, Fatima Khan (Director, Corporate Counsel, Product and Privacy, Okta, Inc.) and Debra Farber (CEO, Principled LLC) shared their insights on some of the exciting trends and developments in the privacy tech space that happened this year.
Select 2021 privacy tech highlights
2021 has been quite a the eventful year in the emerging privacy tech industry. Suffice it to say that the TROPT Innovators community came up with no shortage of their favorite privacy tech developments and trends, but we briefly summarize select ones from our discussions below:
Increased funding in privacy tech
2021 saw $1.5B in funding towards privacy tech startups. It also saw big VC firms dip their toes into the emerging privacy tech industry. For example, Greylock invested in Neeva, while Sequoia invested in Skiff and the latter even went further to articulate their privacy tech thesis focusing on Web 3.0 consumer privacy tech startups.
“Shifting privacy left” to development lifecycle solutions2021 also saw the launch of several developer privacy tech solutions. Perhaps one of the most exciting trends we’re seeing in the privacy tech space is the desire to solve privacy problems earlier on in the data and development lifecycles. We’re seeing this trend shift left, before data is collected, as early as the development lifecycle when products are developed and critical decisions affecting privacy are made. Privacy tech users and buyers want visibility into how code and algorithms affect privacy. They want code governance tools for developers to use. In other words, they want to stop privacy problems before they’re created. TROPT Innovators Ambassador member, Ethyca, is playing in this space and launched Fides in 2021.
The intersection of privacy tech and Web 3.0
Speaking of Web 3.0, 2021 saw more privacy tech solutions developed in the Web 3.0 space. [Some background: Web 3.0 is the next stage of the Internet. Because this stage is currently still being built, there is no universal definition of “Web 3.0” yet. In practice, however, Web 3.0 refers to an Internet that is made possible by decentralized networks. The Web3 Foundation refers to Web 3.0 as “a decentralized and fair internet where users control their own data, identity, and destiny.”] Because Web 3.0 and privacy tech both have the shared goal of enabling user control over their personal information and identity, we’re seeing many startups straddling both Web 3.0 and privacy tech industries. Some of the privacy tech developments we’re seeing in Web 3.0 include zero knowledge proofs (ZKP) applications to decentralized ledger technologies (DLT), data unions, privacy cryptocurrencies, etc. Special shoutout to the work Sir Tim Berners-Lee and the Inrupt and Solid teams are doing in decentralizing the web and giving individuals more control over their personal data.
Decentralized identities and increased user control
It wasn’t only in Web 3.0 that we saw a spike in privacy tech solutions with decentralized identities and increased user control solutions and features. This should come as no surprise. After all, privacy problems remain to be solved in today’s Internet and the transition to Web 3.0 is not expected to happen overnight. Part of the challenge is going to be bridging Web 2.0 and Web 3.0, of course.
Big Tech privacy failures fueling privacy tech
We continued to witness Big Tech privacy failures in 2021. It was quite the revelation to see entrepreneurs and technologists leave Big Tech, as is the case of former Googler, Sridhar Ramaswmy, founding privacy-first, ad-free search engine, Neeva. Many other entrepreneurs and technologists rose up to the occasion to build privacy tech solutions in response to Big Tech’s privacy failures. It’s thrilling to see the emerging privacy tech industry beginning to pay back decades’ worth of mounting privacy technical debt.
Defining & categorizing the privacy tech industry
Last yet certainly not the least, in our opinion: we published The TROPT Defining the Privacy Tech Landscape Whitepaper 2021, a necessary foundational step towards understanding, defining, and categorizing the nascent privacy tech industry! It sets a baseline understanding of what constitutes privacy tech, equipping privacy tech key players to identify privacy tech products and act on the resulting marketplace opportunities. Because we believe in privacy’s value, we see numerous opportunities for privacy tech key players: privacy tech product ideas for founders, partnerships for privacy tech startups, privacy tech investments for investors, privacy tech solutions for buyer-users, and advisory roles for domain experts, just to name a few. We see these privacy tech opportunities only rising in 2022.
We thank Fatima and Debra for sharing their insights as privacy tech advisors and domain experts. We also thank TROPT advisors, Melanie Ensign, CEO of Discernible Inc., and Gilbert Hill, privacy technologist (and early privacy tech founder), both of whom shared their respective perspectives in our discussions.