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Data privacy, governance, and compliance company OneTrust has announced plans to acquire Convercent, an ethics and compliance software platform with major enterprise clients that include Hain Celestial, Kimberly-Clark, and Under Armour.
The deal comes amid a flurry of activity across the digital privacy space — spanning product launches, VC investments, and acquisitions — as businesses have come under pressure to comply with not only an array of data privacy regulations, such as GDPR in Europe and CCPA in California, but also growing privacy expectations from their users.
Founded in 2016, Atlanta, Georgia-based OneTrust, which recently raised $300 million at a $5 billion valuation, is one of numerous startups striving to capitalize on the burgeoning $80 billion data privacy market. The company offers various data privacy tools that help businesses such as Oracle, Marketo, and Akamai determine how closely they are complying with legal frameworks such as GDPR and how data is flowing through their organization and across borders. OneTrust also offers tools spanning cookie compliance, consent management, breach response, and more.
Based in Denver, Colorado, Convercent is an eight-year-old VC-backed startup specializing in cloud-based ethics and compliance software and includes a suite of apps spanning whistleblowing, policy management, conflict, and disclosure. The company’s main ethics and compliance portal serves as a single channel through which employees can access company policies and programs related to data privacy, with built-in features that support online chat, videos, and more.
The acquisition is expected to close in April, after which OneTrust said it will integrate Convercent into its main platform for “enhanced ethics and compliance capabilities,” including centralized policy management through which its customers will be able to “orchestrate all aspects of trust.”
The momentum behind the acquisition appears to stem from OneTrust’s recent launch of its own ethics product, which includes tools to help whistleblowers securely and confidentially report incidents they witness internally.
“Based on the significant demand we saw for this solution, Convercent provided an opportunity to accelerate the availability of both that solution and the broader ethics and compliance platform,” OneTrust CEO Kabir Barday told VentureBeat. “After the acquisition, OneTrust and Convercent together have the market-leading whistleblowing solution used by 750 organizations worldwide, as well as an ethics and compliance portal, policy management, disclosure management, analytics and benchmarking, and learning.”
The acquisition follows a degree of consolidation in the data privacy and compliance sphere. In the past few months alone, LiveRamp acquired privacy-focused data unification engine Datafleets; HelpSystems snapped up data security platform Vera; and OneTrust itself this month bought DocuVision, the company behind an AI-powered platform that companies use to find and redact sensitive data in large volumes of documents.
So what is driving all this consolidation? Barday thinks it’s partly due to companies wanting unified solutions rather than having to select from different software suppliers.
“Organizations are finding that their bigger-picture goal is to be a trusted brand for their customers, vendors, and employees,” Barday explained. “Investing in separate privacy, ethics and compliance, or third-party risk tools in silos isn’t as efficient as a platform [with] embedded, integrated capabilities. This, plus the pace organizations need to move at and also the desire to reduce the number of vendors they work with — and therefore reduce risk surface — is driving the consolidation.”
Ultimately, as enterprises continue to embrace the cloud and applications that harness large swathes of data, the issues of data privacy, governance, ethics, and security are only going to grow. Moreover, continued investments in AI and machine learning will underscore the need to invest in robust ethics and compliance tooling.
“The challenge is, AI and machine learning depends on really large datasets of information — sometimes produced internally, sometimes produced externally — that can have inherent bias and other issues,” Barday said. “These can cause massive problems, like reinforcing social issues, divides, and biases. Solving these issues is an ethical problem, and the combination of an ethics platform with a privacy, data governance, and security platform allows this more ethical view of how data powers AI and machine learning.”
Barday confirmed that when the acquisition closes next month, Convercent will continue to be available as it currently is, through its own platform and website. “We’re accelerating investment in the platform on its own, and in parallel integrating and merging into the OneTrust platform,” he said.
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