AT&T's recent mega-customer data breach (74 million accounts affected) reveals how much influence data carriers have on their users and that their data exists because of hacks I made it. On Thursday, he announced $61 million in funding to help a Washington, D.C.-based startup called Cape, founded by former Palantir executives, build what it claims will be a safer approach. Giving away your name, address, social security number, or location because they never asked for it in the first place.
According to the company's website, “You can't leak or sell what you don't have.” “We ask for minimal personal information and store sensitive credentials locally on your device, not on the network. It's privacy by design.”
The funding is notable in part because Cape's appeal to users has yet to be proven. The company only came out of stealth four months ago and has yet to launch a commercial service for consumers. CEO and founder John Doyle said in an interview that it is scheduled for June. The company is operating one pilot project, deploying some of its technology jointly with the U.S. government to secure communications in Guam.
The $61 million the company announced Thursday is the sum of three rounds: a seed round, a $21 million Series A (raised when the company was still in stealth mode as a private tech company), and a $40 million Series B. The latest round is co-led by A-Star and a16z, with participation from XYZ Ventures, ex/ante, Costanoa Ventures, Point72 Ventures, Forward Deployed VC, and Karman Ventures. Cape did not disclose its valuation.
Mr. Doyle attracted the attention of investors in part because of his previous role, including nearly nine years as director of national security operations at Palantir. Prior to that, he was a Special Forces Sergeant in the United States Army.
These jobs exposed him to users (such as government agencies) that treat the security of personal information and privacy regarding data use as essential. But he also started thinking more entrepreneurially and about consumers.
Today, data privacy and security have become a major focus in the public consciousness, which usually leads to a lot of bad news about data breaches, social network intrusion activities, and many questions regarding national security and digital networks. This is because you will be asked. There is a clear opportunity to build tools like this for the general public, even if it feels like it may not be possible now.
“In fact, that's one of the reasons I started the company,” he told TechCrunch. “It feels like the problem is too big, right? Our data is already out there in so many ways, and it feels like we can’t do anything about it. We all need the ability to connect. They have some kind of private control over their own data, but that's not necessarily true.”
Cape's initial efforts will focus on offering eSIMs to users, which Doyle said will primarily be sold in a prepaid format to avoid data associated with contracts. Cape also announced a partnership with US Cellular on Thursday. The company itself offers MNVO, which covers 12 cellular networks. Doyle said Cape is also in talks with other carriers. Initially, Doyle said it is unlikely he would bundle his eSIM with a mobile device, but that is not a possibility in the future. The company also won't offer encryption services for apps, voice calls, or mobile data, at least initially.
“We are not focused on the security of the content of our communications. There are many app-based solutions out there, apps like Proton Mail and Signal, WhatsApp and other encrypted messaging platforms. “It works well to varying degrees, depending on who you trust to secure your communications,” he said. “We are focused on our customers' location and personal information data, particularly as it relates to connectivity to commercial mobile phone infrastructure, which are related but separate issues. ”
Cape isn't the only company on the market trying to address privacy in the mobile space (and in the past tense), but so far none of them have had any notable success. In Europe, recent efforts include MVNO Murena, OS maker Jolla, and hardware company Punkt. Some that have come and gone include the Privacy Phone (FreedomPop) and the Blackphone (made by Geeksphone and Silent Circle).
The option to buy prepaid SIMs anonymously already exists in the U.S., but Cape points out that this has another trade-off and is not as secure as what Cape is building. Although this payment may be anonymous, the user's data is still routed through the underlying carrier's network infrastructure, making the user's movements and usage observable. You may also still be vulnerable to SIM swap attacks and spam.
For a16z, the investment is part of the company's “American Dynamism” initiative, which this week raised $600 million from its latest round of $7.2 billion in VC funding.
“Cape's technology is the answer to critical vulnerabilities that have long existed in today's communications infrastructure, impacting everything from homeland security to consumer privacy,” said Katherine Boyle, general partner at a16z, in a statement. ''. “This team is applying its superior research and development capabilities to rethink traditional communications networks for the first time, and is well-positioned to reimagine the way mobile carriers think of subscribers as customers, rather than products. .”