Caden Raises $6M to Help Users Reclaim and Sell Their Online Data
Data privacy legislation is becoming an increasing concern for tech companies that have built their revenue model around customer data.
Just this week, Meta was fined roughly $414 million for violating the European Union’s privacy laws. In the U.S., California, Virginia and other states have passed data privacy legislation that will go into effect this year.
Entrepreneur John Roa believes this wave of legislation is correcting an early flaw of the internet where companies have profited from users’ “implicit consent” to sell their data. Recognizing that implicit consent will not meet the standards of emerging privacy laws, Roa developed Caden, an NYC startup that pulled in an oversubscribed seed round this week. Caden allows users to take ownership of their online data and control how it is monetized.
“That one paragraph that some lawyer wrote on page 95 of the terms of service that no human being has ever read is no longer good enough,” Roa told Built In. “But if you get explicit consent and if the user says, ‘Yes, I understand what you’re asking me. I’m cool with it, and here’s what I want in exchange for being cool with it,’ then the whole system begins to work again.”
Roa first developed the idea for Caden shortly after selling his last startup, ÄKTA, to Salesforce in 2015. He took a sabbatical in Greece and wrote a book about the personal toll of being an entrepreneur. Roa returned to the U.S. five years later to publish his book with Penguin Random House in New York, and he founded Caden shortly thereafter.
Roa said he intends to focus Caden’s work here in NYC. The company’s current team of 24 people work on a hybrid basis out of an office just west of SoHo. Roa plans to add another 10 people to the team with the help of a $6 million investment announced this week. The round was led by Streamlined Ventures and included participation from AME Cloud Ventures, which is led by Yahoo! co-founder Jerry Yang.
Caden’s mobile app is currently in private beta and expected to launch in mid-February. The app allows users to select which apps they want to pull their data from. After Caden has pulled their data, the platform encrypts that data in the user’s vault.
With their data in hand, users can see visualizations of how they use Uber, Amazon, Netflix and other platforms through Caden’s HotLink platform, which Roa described as “the Plaid of personal data.”
Users can also opt-in to several tiers of monetizing their data.
“You can do it anonymously, which is where we will aggregate your data, remove your identity and pay you a bit of money,” Roa said. “Or, if you agree to seeing more personalized advertisements around the web, we’ll pay you more money. If you want to have direct brand relationships, we’ll pay you more money.”
Roa expects users will make $5 to $20 per month from their data by providing anonymous aggregated data to alternative data buyers, such as hedge funds who want to develop their own insights and projections.
Users could make roughly $50 per month or $600 per year, Roa said, by selling their data to adtech companies. These firms would not know the identity of the user, but they could use the data to serve personalized ads to the user.
In the future, Caden wants to facilitate users’ direct relationships with brands. For example, Caden users could hypothetically agree to let Netflix use their data from other platforms, allowing Netflix to show the user a documentary about Italy to prepare for their upcoming European vacation. Roa estimates users could be able to make thousands of dollars per year through this sort of agreement.