Deal focus: Securing a nation’s digital vaults

Contemplating a lifetime's worth of savings as a series of ones and zeros in a bank computer lends a whole new gravity to the pursuit of securing digital information exchanges. So when Australian financial technology start-up Data Republic approached potential investors that could think progressively about data security, the country's biggest banks naturally rose to the top of the list.

Data Republic CEO Paul McCarney and Danny Gilligan, co-founder of Westpac's VC arm Reinventure, sparked the idea for the company by exploring solutions for more secure data transfers at a time when financial institutions are under increased pressure to keep customer information confidential. This led to a A$10.5 million ($7.6 million) Series A round including a first-ever external start-up investment from Qantas and participation from both Reinventure and National Australia Bank's NAB Ventures unit.

"A bank is a very good high-water mark for how companies think about data and how secure they keep private information," McCarney explains. "So we thought if we could pass the governance test from a bank around our legal framework and the procedures and protocols of our platform, then that would be a good sign for other companies to understand that we take the ramifications of privacy and trust breaches very seriously."

Data Republic's flagship Senate platform leverages the rise in information traffic by managing and governing risks associated with electronic transfers. It previously partnered with Westpac to develop a bank-grade security infrastructure project that is said to be the world's first data banking service.

"This strategic equity partnership gives us a seat at the table to help develop Data Republic's capabilities and ultimately improve the experience for NAB customers in the future," says Todd Forest, managing director at NAB Ventures. "We know that banking is undergoing significant transformation in the digital space and the simple aim of NAB Ventures is to help ensure we can embrace the right changes to deliver new customer solutions."

The capital will also be used in part to advance a US expansion from a new San Francisco office, where access to more web services and software marketing expertise is expected to drive product development capability.

Although big banks represent most of Data Republic's bedrock investment, the company's services remain sector agnostic. Most Senate users are consulting groups that use the product to build datasets on market patterns that can be resold to corporate clients. Use cases for this technology are being investigated across the retail, property, insurance, government, social and charity spaces.

The company also claims a unique offer in its role as a data exchange intermediary, providing transaction regulation and recourse to clients when disputes arise around privacy law or the legal use of data. "There are companies that take a services approach in this space, but no one has taken a legal framework and built a platform on top of it," McCarney says. "There are a lot of datasets out there, but to actually go through the process to get access to them is a long legal discussion."

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• Topics
• Australasia
• Technology
• Financials
• Expansion
• Venture
• Australia
• NAB
• TMT