Skyflow Raises $17.5M to Enhance Data Privacy

Companies that secured funding earlier this year are experiencing renewed success as 2020 nears its conclusion.

Today, that includes Skyflow, a company previously featured by TechCrunch in May following a $7.5 million funding announcement. The organization revealed a further investment totaling $17.5 million on Tuesday. This new round, designated as Series A, was spearheaded by Canvas Ventures, with Foundation Capital, the lead investor in the company’s prior Seed round, also participating in the financing.

Skyflow provides a service enabling clients to securely store confidential data within a zero-trust repository, essentially a digital vault, accessible through an application programming interface (API). The company employs a technique known as polymorphic encryption to safeguard customer data and enable precise control over data access—further details are available in a dedicated white paper.

TechCrunch previously noted, upon the company’s initial Seed funding, that if the technology performed as described, “Skyflow could be beneficial to numerous companies that either lack the resources or the inclination to adequately protect the data they collect.”

The technology appears to be functioning effectively, as the startup has acquired several customers in recent months. According to co-founder and CEO Anshu Sharma, Skyflow secured its first client—a contract valued at seven figures—within two weeks of its product launch in July. This rapid progress meant Skyflow quickly reached a stage of maturity where it could pursue a Series A round, traditionally indicated by achieving $1 million in annual recurring revenue (ARR). It’s worth noting that the initial contract may have spanned a period exceeding one year.

Considering the appealing initial annual contract value (ACV) and the current pipeline exceeding eight figures, as stated by the CEO, it’s understandable that Skyflow was able to attract additional investment.

Canvas Ventures expressed interest even before the contract was finalized, contacting the startup regarding potential investment shortly after the announcement of its Seed round. Paul Hsiao, a general partner at Canvas, initiated contact in June, inquiring whether the company was considering a Series A raise. Despite receiving an attractive valuation (valued at nine figures, according to Sharma), the company initially hesitated to discuss further capital.

After securing additional customers, Skyflow still maintained a healthy cash reserve but began exploring the possibility of raising more capital (a common practice in venture capital—raising funds when not immediately needed). The CEO mentioned that some larger investment firms sought ownership percentages that the founding team found unsatisfactory. Ultimately, the first investor to demonstrate strong conviction prevailed, and Skyflow completed the deal with Canvas.

What’s ahead for Skyflow

The company is refining its strategy for reaching customers. Sharma communicated to TechCrunch that Skyflow has developed different versions of its offering to address specific markets such as financial services, healthcare, and identity management – sectors characterized by strict regulations and highly confidential information. Skyflow was specifically designed to handle the complexities of these types of datasets and is well-positioned to operate within these environments.

Skyflow is also expanding its team, particularly to support larger clients who benefit from dedicated sales support. According to a company statement shared with TechCrunch prior to publication, Skyflow plans to add more engineers to its staff and further develop product versions tailored to individual industries.

The startup has also recently brought on board several key personnel, including Paul Kopacki, formerly the Chief Marketing Officer at Heroku, and Karthik Rajan, a previous Vice President of Engineering at Salesforce.

Having demonstrated promising early results and secured additional funding, Skyflow is currently in a strong position. The company’s next focus will be maintaining its growth trajectory while ensuring the continued security of the data under its protection. We will follow up with the company to request updated growth figures after a full year of sales activity.