Karlsgate technology enables a decentralized data connectivity network that exchanges insights without requiring trust to match data.

Karlsgate, a fast-growing startup developing a federated approach to data enrichment, today announced that it closed an oversubscribed $4 million Seed funding round to expand its next-generation, HIPAA-/GDPR-/CCPA-compliant data connectivity network (DCN) solution. The Karlsgate platform solves a core technical challenge that threatens the global data economy today. It has developed a DCN solution that fulfills two critical requirements for the future data economy that have been technically contradictory until now – enabling more efficient data exchanges/flows while meeting and exceeding increasingly stringent global data privacy regulations. M12, Microsoft’s Venture Fund, co-led the round with Motley Fool Ventures.

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“We believe that the world is headed toward a future when data are efficiently exchanged (a) without transferring PII / PHI, (b) without cookies, (c) without re-identification risk, and (d) without PII/PHI exposure risk in-flight or at rest”

The zero trust approach to information security is gaining traction as organizations aim to confidently protect sensitive data assets by default. Karlsgate is bringing the zero trust approach to data connectivity with its Karlsgate Identity Exchange (KIE) platform. This is made possible with innovative cryptoidentity technology, which enables a secure and efficient way to match personal information while preventing re-identification risk through triple-blind data orchestration.

“We believe that the world is headed toward a future when data are efficiently exchanged (a) without transferring PII / PHI, (b) without cookies, (c) without re-identification risk, and (d) without PII/PHI exposure risk in-flight or at rest,” said Kouki Harasaki, PhD, Managing Director, M12 – who will be joining the Karlsgate board. “The Karlsgate solution is a decentralized, zero trust cryptoidentity platform that meets these needs today.”

Sensitive data never changes custody using this approach, instead identifying information stays in its protected environment, while embeddable software communicates cryptographic signals across your private network to find matches between datasets and share information. One of the major benefits is the “connect once and link with everyone” integration effort. Data assets can be linked in less than an hour with the “no-code” tools. Building your own DCN of data partners can, at once, be both protective and collaborative.

“For industries like financial services, healthcare, and other sectors, Karlsgate could be the transformational data exchange solution they’re seeking—private, secure, user-controlled, and compliant,” said Ollen Douglass, Managing Partner, Motley Fool Ventures.

“The biggest unaddressed issue for data connectivity today is control. The existing approach always starts with a copy of personal data being transferred outside your custody, which is no better than a large-scale photocopier of sensitive information. This poses a huge challenge to meet data governance and data protection/privacy regulations. It erodes the value of data ownership and limits the ability to meaningfully control, audit and truly delete data,” said Vivian Zhou, Co-founder and Chief Product Officer of Karlsgate. “We see a future with controlled access instead of needless copies of data. If you prevent both disclosure and re-identification, you can meet compliance requirements and scale your data strategy efficiently.”

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