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Data clean rooms, a buzzy term that’s gained currency among the enterprise lately, refers to a secure environment where customer data is anonymized, processed, normalized, and stored. The concept is designed to balance privacy with utility, helping to aggregate data from different sources and combine it with first-party data to provide insights. For example, in the advertising domain, a data clean room can allow brands to collect data about ad performance on a given platform and use that data to evaluate their campaigns.
As data clean rooms rise in popularity — Gartner predicts that by 2023, 80% of advertisers with media budgets of $1 billion or more will utilize data clean rooms — tech giants and startups alike are jumping to make waves in the nascent market. For example, Amazon and Google offer clean room services that enable brands to connect ad campaign performance data to their own data for analysis. Other vendors include Habu and BlueConic.
“Privacy laws and tech platform policies are putting new limits on consumer data collection and exchange,” Gartner senior research director Eric Schmitt told VentureBeat via email. “Companies have responded by putting new emphasis on consented, first-party data capture from their prospects and customers. Clean rooms provide a mechanism for companies to make that data available in privacy-safe fashion, by connecting datasets that are sourced from more than one company. Clean room uses vary, but commonly include ad-hoc query and insight generation, as well as ad targeting and measurement.”
Zürich, Switzerland-based Decentriq is a newer entrant to the space, having launched in 2019. Founded by Maximilian Groth and Stefan Deml, the company today announced that it raised $15 million in a series A funding round led by Eclipse Ventures with participation from Atlantic Labs, btov Partners, and Paladin Capital Group.
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“We’re proud of the Decentriq platform that our incredible team has been building for the past year,” Groth said in a statement. “Our data clean rooms enable companies to collaborate on the most restricted and sensitive data in a secure … manner to unlock new value and deeper insights.”
Securing customer data
Groth, the CEO of Decentriq, previously led business development at big data analytics company Teralytics. Deml also worked at Teralytics, where he was VP of product development and a tech lead, and contributed to the Ethereum Foundation — the nonprofit organization dedicated to supporting the cryptocurrency Ethereum — as a cryptography engineer.
“Through our previous roles, [Deml and I] identified a clear market need for enterprises to share and combine their data sets, to enable collaboration and innovation,” Groth told VentureBeat via email. “The advantages that could be gained for all parties in the ability to more freely share data are self-evident, but there was no solution at the time for how this could be done safely, without breaching data privacy regulations or putting sensitive information at risk. This is the challenge Stefan and I sought to solve when we launched Decentriq in 2019, by creating a tech platform that is the equivalent of a ‘Switzerland for data,’ where security and privacy is guaranteed.”
Decentriq claims to use “encryption-in-use” technology including confidential computing to “ensure that no one but the data owner can access their raw data uploaded onto the platform.” This technology, the startup avers, can enable users across companies in banking, insurance, health care and life sciences, market research, media and advertising, and retail and consumer packaged goods to work with sensitive data while preserving privacy and adhering to regulatory standards like the European Union’s General Data Protection Regulation and the California Consumer Privacy Act.
Confidential computing is a cloud computing technology that isolates sensitive data in an encrypted CPU enclave during processing. The contents of the enclave — including the data being processed and the techniques used to process it — are, in theory, accessible only to authorized programming code.
“We use AI in combination with our state-of-the-art encryption and privacy-enhancing technologies. It plays an enabling role, helping us to preserve privacy at scale,” Groth explained. “There is a big mental shift taking place today on the tools for creating a trusted partnership. Historically, this has always been done on paper — i.e., with contracts. Going forward, technology will be used as the safer, more efficient and more reliable way to create a trusted collaboration between two partnerships. Technological mechanisms for guaranteeing trust are simply far more reliable than promises, and they are also much quicker to establish worldwide, and at scale.”
Companies using Decentriq can connect existing data analytics tools to the startup’s data clean room platform. Then, they can upload data from sources including static files, local databases, and cloud storage repositories. For Swisscom, the Swiss telecommunications provider, Decentriq created a product for data sharing, benchmarking, and “sensitive” user surveys. Another customer, medical tech manufacturer LynxCare, is using Decentriq to combine and analyze data across multiple hospitals on the public cloud, according to Decentriq.
Expanding confidential computing
Beyond data clean rooms, Decentriq is riding a broader confidential computing wave along with players including Intel, IBM, Meta (formerly Facebook), and Microsoft. The startup was one of several to join the Confidential Computing Consortium, an industry group established by the Linux Foundation in 2019 to improve security for data in use. A recently published Everest Group found that the confidential computing market could grow to $54 billion by 2026, fueled by enterprise cloud security initiatives and expanding regulations, especially in privacy-sensitive industries such as healthcare and financial services.
“[S]haring sensitive data among organizations and combining it with public information has the potential to become a multi-trillion dollar industry. We have observed the early adopters in this space, in particular social media and advertising companies, capitalize on this market,” Groth said. “However, increasingly we are seeing organizations across all industries explore the opportunities in their sector, whether they are a health care company or a financial institution. Very soon, those who don’t start take the opportunity to securely collaborate on data sets will be at a disadvantage.”
Twenty-employee Decentriq claims that 20 of the largest pharmaceutical companies in the world have been collaborating in a Decentriq-built data clean room, including organizations like the Swiss Army and Mobiliar Insurance. The capital from the latest funding round, which brings Decentriq’s total sum raised to over $18 million, will be used to expand the types of analytical tools available on the platform, introduce features including support for synthetic data and differential privacy, expand to new markets, and grow Decentriq’s team, Groth says.
“There are companies operating in the same sphere as us, such as InfoSum and Duality Technologies. However, what sets us apart is the combination of confidential computing and privacy-enhancing-technologies. By combining encryption of data in-use through the latest confidential computing technologies, while protecting output data privacy with differential privacy and synthetic data generation, we can guarantee the highest level of security and confidentiality,” Groth said. “This means that our customers don’t need to trust each other, or even Decentriq itself, the data is completely obscured — not even we can see it. This unlocks use cases for collaboration and analysis that have simply never been possible before. At the same time, our platform does not compromise on usability, data utility and scale — the analysis would be useless without the ability for organizations to easily extract meaningful insights.”
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