Security startup OneTrust is cashing in on the mad dash for data privacy tech with more than $400 million in venture funding in just the last 7 months

• Data security startup OneTrust announced its $210 million Series B on Thursday. Insight Partners and Coatue Management led the round, which valued the nearly 4-year-old startup at $2.7 billion.
• It comes less than a year after OneTrust raised a $200 million Series A as its first outside funding round in July.
• OneTrust CTO Blake Brannon said that, although the company wasn't looking to fundraise, customer demand spiked after California's landmark privacy legislation went into effect in January.
• One of the thornier aspects of data privacy has less to do with fines and regulations, but whether or not companies are making ethical decisions in regards to how they use the data they collect, Brannon said.
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Data is eating the world, and shoring up its protection has ballooned into a huge market opportunity.

Fresh off a $200 million Series A in July, data security startup OneTrust is back with an additional $210 million to help companies navigate the new privacy-conscious world order.

The Atlanta-based startup announced its $210 million Series B on Thursday, which essentially doubled its valuation to $2.7 billion, was led by Insight Partners and Coatue Management.

"They've really crushed it," Insight Partners managing partner Richard Wells told Business Insider. "[The funding] was not something they actively sought out; it was actively brought to them."

That aside, a lot has changed in the last seven months. California's landmark privacy legislation had been signed into law but had yet to go into effect. Other states are now watching how the law plays out with separate draft legislation just waiting to debut. Users are increasingly aware of, and alarmed by, the growing data footprint they've left online - data that often flows into the digital coffers of dominant tech companies like Facebook.

"We are helping you understand what you are doing with data and how it is being used, because that's the fundamental challenge with privacy," OneTrust CTO Blake Brannon told Business Insider. "If you are a cancer research institute, you are capturing really sensitive data, but it's in what you do with it that the privacy problems arise."

And that's OneTrust's pitch - to help companies understand and adhere to the vague gray areas around data privacy and data security even in states or countries that have yet to pass sweeping legislation, Brannon said. But legislation helps make the case, Brannon and Wells both said, and contributed heavily to the skyrocketing demand OneTrust has tracked since July.

"We saw a huge growth in requests to help companies execute consumer rights requests," Brannon said. "They were looking for ways to update privacy policies and tie in to the backend systems where they use that data to automate the deletion process, so we built and actually patented much of the tech to help companies making those requests."

Higher costs, higher stakes, bigger rewards

Brannon explained that many companies opted to "wait and see" how international legislation like Europe's GDPR would play out, but were pushed to action once similar legislation arrived stateside. Other states are waiting with bated breath and their own draft legislation again, but now the stakes are higher.

"Historically, governance and compliance have been the area of banks, healthcare, and retail," Brannon said. "Now industries aren't being regulated, data is regulated. Everyone needs a broader governance idea."

Part of that push comes from the users themselves, even if they aren't in Europe or California, Brannon said. There's an expectation that companies be transparent about data usage, whether or not that's the case in practice. That, in turn, puts pressure on companies of all sizes to address what they feel are the ethical uses of the massive troves of data they've collected.

"This is where it's not about the law and just avoiding fines," Brannon said. "It's the broader, are we comfortable with the information we have, and how we are using that."

It's the kind of market focus that investors dream of, Wells said, because it has the ability to weave itself into every major business that relies on data to function (hint: most, if not all, businesses these days). But with massive rounds falling out of favor in Silicon Valley, investors are betting that OneTrust could be a new kind of tech unicorn.

"CCPA just continued to stoke demand and interest in this whole category," Wells said. "We knew it was coming when we invested last summer, and it helped grow revenue beyond even the robust expectations we had for the company. This is far bigger than just one individual regulation."