Caden launches with $3.4 million to help consumers take control of their data – TechCrunch
Entrepreneur John Roa believes in the value of privacy. After selling his design consultancy, ÄKTA, to Salesforce in 2015, he decided to spend a few years “off the grid” on an island in Europe.
Now he’s back in New York, throwing Caden, a startup that allows consumers to share their data with companies and get paid in return. Roa wrote the business plan as a thesis on the future of data privacy while working at Salesforce, just before starting his sabbatical, he told TechCrunch.
When he first wrote the business plan, it was “purely speculative,” Roa said. He anticipated that the regulations would present challenges for companies in storing third-party or passively collected data, and envisioned a long-term shift to a “privacy first” world where users own their personal data and have full control and consent over their use.
Caden, who just came out of stealth mode with a $3.4 million pre-seed round, is Roa’s attempt to build that world. Jerry Yang, co-founder of TechCrunch’s parent company Yahoo!, participated in the round alongside Starwood Capital’s Barry Sternlicht, former Citigroup CTO Don Callahan and other angel investors, according to the company.
The company calls itself a “zero-party” data platform, meaning users only share data with brands on a voluntary basis. One of its main products is an encrypted ‘on-device vault’ where a user can store their personal data and view insights drawn from it – a Roa feature compared to Spotify’s ‘Year in Review’ , but covering a broader set of preferences and behaviors.
Caden’s second core product is an API called Link, which allows users to log into accounts like their email or bank and pull their data for storage in the vault. Once in the vault, the user can then choose to give permission to specific companies they trust to use the data, and can revoke or change permissions at any time as users ultimately own of their data stored with Caden, Roa said.
Roa’s team began working on the technology nine months ago and plans to release its beta mobile app within the next six months. This will allow users to immediately start receiving compensation for their data, Roa said, comparing the app to a savings account.
A majority of US states have passed or are considering legislation similar to the California Consumer Privacy Act (CCPA), a state law enacted in 2018 that gives consumers the right to refuse to allow companies to sell their personal information. Although companies have been collecting third-party data about their users for years, Roa said the regulations are turning third-party data collection into “more of a liability than an asset” for companies due to onerous data requirements. audit and compliance. Zero-party data, he added, is more accurate and robust because it comes directly from the user.
Caden hopes to attract consumer brands first because they have the most to gain from better access to data, investor Jerry Yang told TechCrunch in an email.
“When you think about the amount of effort and resources it takes to collect and store data, infer information, protect it, buy third-party data, and keep it current, Caden creates a platform solution that empowers many businesses operate without doing so themselves. Beyond the first phase, I am confident that Caden can also go beyond consumer businesses,” Yang wrote.
Caden isn’t the first company to foray into this space. Datacoup tried it in 2012 with its platform that allowed users to sell their data directly to companies, and ended up closing in 2019 because users only earned paltry sums. Consumer data is difficult to assess and companies are driven to find ways to pay as little as possible for it.
Roa believes Caden will be able to overcome these challenges by providing a superior user experience.
Although brands aren’t usually keen on giving their data back to users, Roa said, “now they have to legally do it, but they don’t have to make it easy.”
“What Caden and others are doing is finding ways to make it a much more streamlined process, completely user-centric, so we don’t really need third-party companies to get this action,” he added.
He also wants to unlock intangible value for consumers through better brand experiences, not just direct payments.
“If by using Caden your life becomes just a little more enjoyable, things are served to you and spoken to, those are those value points that we focus on. And that’s where a lot of our contemporaries struggled,” Roa said.