Consumers share their data for free all day. When you swipe a credit card, order lunch, binge-watch Netflix, track your run or browse Amazon, companies watch, learn, analyze and—most importantly—sell the information they collect.
Caden, a Hudson Square-based start-up, has just announced a $15 million fundraising round to power an attempt to fix this imbalance and give consumers some ownership of their data. Its app has gained traction with consumers in its early months.
“We need to give digital citizens a lot more credit,” founder John Roa told Crain’s. “They understand they’ve been giving their data away for free, so if you offer someone a more rewarding way to be in control, they’ll take it and be excited about it.”
Caden raises $15M Series A to build a model for consumer privacy on the internet
Roa said he had been nursing the idea of making a privacy-centered internet experience feasible for eight years, since selling a previous company, design consultancy ÄKTA, to Salesforce, in 2015.
Caden works by asking users to sign up for its app. There, in just a few minutes, users lay claim to the data they generate and consent to share that data with Caden. Currently, users can choose to have their browsing and purchase data shared as part of an aggregate audience. In exchange, they can earn between $10 and $20 a month.
Soon, Caden plans to launch two other tiers. In tier two, users can consent to be part of an identifiable cohort, where their actual travel plans or Netflix viewing habits can be shared; in exchange they may see more relevant ads such as activity recommendations for an already-booked trip or compelling movie suggestions; and they’d earn around $50 a month. In tier three, consumers volunteer to share individual data with specific brands they trust. That might mean letting Marvel know you’re a superfan or giving Nike insight into your exercise habits; in exchange, you’d make more money from the app and receive targeted recommendations or invitations.
Caden previously raised a $3.5 million pre-seed round and a $6 million seed round, which allowed it to do the research and development to build its consumer app.
Roa said the team sought to collect 1 million data points a week in its early months. Rapid sign-ups allowed the company to surpass the goal dramatically. Since launching in April, the app has collected 1.5 billion data points.
The $15 million Series A will go towards building out the profit center of the business, called CadenOS. Here, businesses can buy data that stitches consumer information together in a way that most individual data sources cannot produce; third-party browsing can’t currently be precisely correlated with credit card or bank transactions, watching habits, or purchases made directly with a brand.
Caden has hired Satya Raje, a PhD in Computer Science and former Chief Ontologist at IBM, to turn the multi-pronged data into insights, using machine learning to speed things up. (Ontology is the practice of integrating different data sources, like purchase data and travel data.) Customers for CadenOS are likely to include hedge funds, media agencies, and brands—anyone who creates products or intelligence based on consumer data, Roa said. Pricing will depend on how many reports customers buy. He estimated that “anyone consuming live query product data will spend five to six figures a month.”
Users will also be able to ask the data questions in an AI-powered product that responds to queries with insights and charts about consumer behavior.
Nava Ventures led the Series A, and other investors include Yahoo co-founder Jerry Yang’s AME Cloud Ventures, Streamlined Ventures, Montage Ventures, Industry Ventures, 1707 Capital and AAF Management. Caden has 25 employees and plans to double that figure by the end of the year.
Roa is not the first to try to build a privacy-first internet, where consumers have some control about what they share. In Europe, the General Data Protection Regulation law requires businesses to ask for opt-in from consumers to collect their data; consumers can also request deletions. California has a similar state statute. The regulation has changed how companies that operate internationally consider privacy. The cookie—a bit of code that tracks internet browsing and was the innovation behind the modern adtech industry—is being retired next year. Even Tim Berners-Lee, considered the founder of the world wide web, is working on companies based around “personal data sovereignty,” as he calls it. Success has not been common in the sector: A New York City startup called Datacoup tried a similar project in 2012 before eventually pivoting to a news site that also grants consumers a privacy score.
Roa said that what sets Caden apart is its ease of use for consumers and the fact that its intelligence data will be smart—not just lists of Amazon orders or Netflix shows. He believes the initial high consumer adoption bodes well for the company’s next stages.
“There’s a wild amount of data flowing in,” he said.