San Diego data scientists with ties to Amazon, RedHat get $50M for digital privacy startup

178, a San Diego startup working to keep sensitive data private but also still useful for developers to deliver better products and services, landed $50 million in a second round of venture capital funding.

Founded in 2019 by data scientists with links to Amazon Web Services, RedHat and Netscout, Gretel is building software algorithms that create “synthetic” data sets out of real data that bake in privacy and help democratize the ability to build machine learning and artificial intelligence algorithms.

The process is complex, but it essentially deploys machine learning to categorize and label customer data. It then applies techniques to anonymize that data — stripping out things like names, addresses and other specific identifiers — so it is no longer linked to real customers.

What’s left is a fake data set that looks and acts like real data, according to Gretel. While Big Tech outfits can afford to hire specialized privacy engineers to anonymize sensitive data, developers at smaller companies typically wait weeks or months for compliance approvals to access similar data.

Gretel’s suite of tools aims to give all developers what they need to implement high-quality data privacy at less cost, time and risk, the company says. It plans to deliver its technology through a “privacy engineering as a service” platform.

“At Gretel, we are building tools that enable privacy by design, which in turn provides fast and easy access to data that fuels innovation with privacy by building it into the fabric of applications,” said Ali Golshan, co-founder and chief executive of Gretel.

Golshan was previously chief technology officer at StackRox, which was acquired by RedHat. He co-founded Gretel with Alex Watson, who ran before it was acquired by Amazon; John Myers, former chief technology officer at Efflux, which was acquired by Netscout, and Laszlo Bock, a former senior vice president at Google.

This latest funding round was led by Anthos Capital, along with participation from Section 32, and existing investors Greylock and Moonshots Capital. It brings total funding raised since founding to $65.5 million. Section 32 was founded by Bill Maris, who spent nearly a decade running Google Ventures before starting his own fund.

“Gretel gives data teams working in any framework or language the tools they need to build privacy by design into their existing workflows and data pipelines, greatly simplifying this process,” said Sridhar Ramaswamy, partner at Greylock. “Its developer-first, tech-agnostic approach to solving privacy issues is incredibly valuable to every business sector.”

Gretel has 20 full-time staff. By the end of 2022, the company expects to hire 50 to 75 more workers, including engineers and researchers, marketers, product managers, developer advocates and sales personnel.

Currently, Gretel is working with customers in health-tech, life sciences, fintech, gaming and education. For example, health-tech companies are looking to enable information sharing and monetize data while protecting the privacy of patients.

“Gretel’s ease of use, the extend-ability of its services, and the superior accuracy and quality of its synthetic data are much-needed solutions to simplify the exceedingly complex legal and technical barriers companies face due to data privacy concerns,” said Emily White, president of Anthos Capital.