We are excited to announce our partnership with Protecto’s $4M seed round, led by Together fund along with our participation with our friends — Arali Ventures, Better Capital and FortyTwo.VC.
In the ever-evolving landscape of technology, Generative AI is eating the software, and the importance of privacy in AI is reaching new heights.
As Gary Kovacs says “Privacy is not an option, and it shouldn't be the price we accept for just getting on the Internet.” In today's digital world, our lives are closely connected to the online world, and we should have the right to keep our personal information safe online. In 2022 alone, over 500 million individuals fell victim to data breaches and cyberattacks, exposing sensitive details ranging from credit card numbers to medical records. A recent incident involving Open AI inadvertently disclosing the titles of some ChatGPT conversations without proper consent is under scrutiny for potential GDPR violation, highlighting the serious consequences large enterprises may face in terms of data privacy fines.
This particular incident sheds light on the serious consequences large enterprises may face in terms of data privacy fines. Importantly, this case is not an isolated event but reflects a broader trend. As businesses, regardless of size, increasingly recognize data as the new oil, the quest for valuable insights heightens the storage of sensitive and personally identifiable information (PII). This, in turn, amplifies their financial and reputational risks in the event of a data breach.
This concern is reflected in the Cloud Software Spending Report, where CXOs rank Enterprise Security as their third-highest spending priority after cloud and data infrastructure
This heightened focus on security is a response to concurrent trends. Over the last few years, both individuals and governments around the world have been pushing for better data privacy and rules about where data can be stored and regulations like GDPR and HIPAA have made it more complicated and challenging for businesses to follow the rules about how they handle data.
As Generative AI is increasingly becoming an integral part of our lives, designing AI systems with privacy in mind from the outset has become more crucial than ever. This means that businesses must prioritize privacy at every stage of AI adoption, from inception to deployment. Data privacy, in particular, is one of the most significant barriers impeding the widespread adoption of LLMs across various industries. Amid the proliferation of LLM-driven solutions, effectively securing and managing personally identifiable information (PII) has become a board-level priority for most organizations. Therefore, integrating privacy-by-design principles into AI system development is essential for fostering trust and promoting the responsible adoption of LLMs in different sectors.
At Speciale, we've been closely following AI developments and published a document (GenAI Co-pilot) and blog on our view of the space. We're excited about the "Enablement Layer" - middleware and tooling that connects the infrastructure and application layers, providing tools for seamless integration, communication, monitoring, and security in the AI stack.
We firmly believe that the next leap in AI advancement, especially in enablement, should prioritize accuracy, privacy, and security. Data Privacy Engineering and "Trusted AI" are gaining prominence as accountability, transparency, and ethical considerations become central to AI discussions. These principles are needed to make sure AI systems are reliable, fair, and used responsibly. This is important because people might be scared to use AI if they are worried about security and privacy problems, which could slow down innovation. We need a solution that can protect privacy and make sure AI systems are accurate and safe throughout their whole AI lifecycle, from when they are first built to when they are trained and fine-tuned. This is very important as more and more businesses want to use Generative AI on their systems.
With the growing use of LLMs-driven solutions, Protecto takes a proactive approach to data privacy and security. By providing unparalleled visibility into the data handled by an organization, including who has access to it and how it's used, the solution helps businesses better understand and mitigate potential risks.
Protecto's unique ability to anonymize and tokenize PII data ensures data integrity, enabling interaction with LLMs without compromising sensitive details. The solution safeguards enterprise data throughout the entire Generative AI project lifecycle from removing sensitive information from training data to preventing data leaks through LLMs interactions, presenting itself as an all-in-one solution for data privacy. Driven by the vision to accelerate AI adoption in enterprises, Protecto firmly believes that privacy is a fundamental human right that must be fiercely protected.
We are still in the early days of generative AI. As early-stage investors, we are committed to partnering with the founders for the long haul, and our confidence in and rapport with the founders is extremely important to us.
When we met Amar and Baskaran, we knew right away that they were an experienced team whose strengths complemented each other, both in their backgrounds and skill sets, but also in their personalities. Their working relationship and friendship go back to their school and college days, which shows the depth of their bond.
Amar, a seasoned entrepreneur with decades of experience in software development, marketing, and product management, gained valuable insights into data privacy, governance, and compliance during his tenure as a successful co-founder of Filecloud. Between 2016 and 2019, Filecloud collaborated with numerous enterprises and government agencies, addressing their inquiries and concerns regarding critical data protection areas.
Baskaran, the Chief Technology Officer (CTO), brings 14 years of experience in big data systems and a unique perspective on handling stringent data privacy regulations. His firsthand experience in developing privacy engineering solutions for Apple's data warehouse in 2018, in response to GPDR requirements, provides him with invaluable insights into navigating complex data privacy mandates.
Our belief in the founders extends beyond their individual capabilities; it encompasses their collective expertise and execution prowess - a strategic visionary at the helm as CEO and a deeply experienced and resourceful CTO; both driven by ambition and their collaborative leadership further solidifies our confidence in the success of Protecto's mission.
The current funding round will fuel engineering capacity expansion in India, and doubling down efforts on the GTM and sales motion; as well as continual work on the product development.
At Speciale Invest, we get excited when founders approach complex problems with first-principles thinking. Our investment in Protecto signifies our dedication to unlocking the full potential of generative AI while ensuring a safe, secure, and trustworthy digital ecosystem. We are excited to have a front row seat on their journey with Amar, Baskaran and Protecto Team.
