Hillhouse leads $28m round for China's DataCloak

GSR Ventures China also came in as a new investor, while existing backers Matrix Partners China and Jeneration Capital re-upped. The company received a $5 million Pre-Series A in 2018 led by Matrix. This followed a Jeneration-led $13 million Series A in January 2020.

Founded in 2018 by a former senior director at Baidu, DataCloak helps companies set up secure, isolated workspaces within employees’ computers and smart phones. Information flows can be controlled and later audited, while an artificial intelligence-driven detection function is able to identify abnormal behavior.

It has launched two products: Zero Trust Terminal Security Workspace (DACS) and Zero Trust Application Gateway (DAAG). Last September, DataCloak introduced China’s first zero-trust security framework. Known as HyperCloak, it integrates existing IT infrastructure into a zero-trust network security architecture.

The company started commercializing its offering in early 2020 and has since served dozens of customers across industries such as finance, high-end manufacturing, internet, and professional services. DACS is used by the likes of Tongcheng-Elong and Youzu Interactive.

“DataCloak provides a safe digital workspace for every employee which conforms to the trend of enterprise remote office, business outsourcing and digital transformation, and it solves the problem of data leakage for Chinese corporate customers. The AI-driven zero-trust security gateway provides customers with a dynamic system of internal and external access control," said Yutong Zhang, a managing partner at GSR, in a statement.

Data security has emerged as a prominent theme in technology investment. China’s Ministry of Industry & Information Technology estimates the domestic cybersecurity industry will be worth more than RMB200 billion by 2025. Last year, it proposed cultivating a group of companies that will achieve combined revenues in excess of RMB2 billion during this period.

For years, the standard government approach to cybersecurity has been physical separation - one set of devices for internal communication and another for internet access. This served as a prototype for the zero-trust concept, whereby vendors use virtual separation to provide convenience and security. Google was the first to incorporate zero-trust into its cybersecurity architecture. The likes of Cisco, Microsoft, Symantec have all followed suit.

Index Capital was the exclusive financial advisor for DataCloak's Series B.

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• Topics
• Greater China
• Early-stage
• Technology
• China
• TMT
• GSR Ventures
• Hillhouse Capital Management
• Matrix Partners
• Jeneration Capital