We caught up with Kyle DuPont, Ohalo founder and CEO, on data protection and life as an entrepreneur. A graduate of the 500 Startups Seed Program, Batch 22, Ohalo is also part of the founding group of companies that created 22X Fund – the first tokenised opportunity for investment in early-stage start-ups.
Please give a brief overview of Ohalo and the problem it set out to address.
Ohalo automates data governance across our customers’ data sources. We respond to GDPR requirements like identifying special classes of data and accessing, deleting and rectifying data across multiple data sources simultaneously. We do this with two products:
The Data X-Ray uses a machine-learning algorithm to scan data sources for sensitive classes of data. It comes pre-loaded with many classes of data that are useful for GDPR requirements (addresses, names, religions, dates of birth, etc.) or our clients can easily retrain the algorithm for sensitive data that they define to enable scanning in multiple languages or for specific classes of data that are unique to them.
The Data Protection Router uses a blockchain to trace data lineage across data sources. A trail of data lineage is an essential prerequisite for GDPR and general good data governance practices because it shows where data has gone so that systems instantly know where to send commands for data access, erasure, and rectification. The blockchain implementation is an abstraction layer on top of existing data sources both within and outside an organisation and allows a completely peer-to-peer network so that no data ever has to flow through a central server that Ohalo or anyone else controls. We use smart contracts to link metadata useful for parsing each data source’s regulatory information to real-world entities.
What’s your own personal background? And, did you always feel drawn to entrepreneurial life?
After graduating with honours, I was pulled to Tokyo, a city I had been fortunate to study abroad in during my university years at Georgia Tech. My pre-entrepreneur life was in finance in one way or another. My first job was actually working as a financial/economic analyst at a civil engineering firm in Tokyo that was doing a lot of government work; I was able to travel all over Asia and Africa on projects ranging from space centre research parks in Vietnam to container terminal expansions in Namibia. Subsequently, I moved to a position at MUFJ Morgan Stanley in Tokyo dealing with carbon credits, where I was heading up project development in China and Korea. After the carbon markets collapsed following the pending expiry of the Kyoto Protocol, I was starting to get frustrated with corporate life and although I did work in M&A a bit, it was during this time that I got the entrepreneur bug.
Around 2012, a British friend in Tokyo got me interested in Bitcoin and at the time there was no GBP to BTC exchange. So we thought, why don’t we start the first Bitcoin exchange in Britain? Found out that it wasn’t that easy. After explaining Bitcoin from the ground up to the (then called) FSA, where I think we were the first to ever mention Bitcoin to them, we discovered that they were very concerned about money laundering and sources of funds before we started an exchange. Being adverse to calling prison our home for money laundering offences and thinking others probably felt the same, we began to build software to trace transactions on the blockchain to discover money laundering.
The market was very young at that time, with the vast majority of exchange activity happening out of Asia at Mt Gox and in one or two Chinese exchanges; it turned out that not all of the persons running these exchanges were as concerned with money laundering laws as we were. We were able to sell to a few customers but the market was very small. We ended up building a know-your-customer (KYC) onboarding tool alongside this transaction monitoring tool that was meant to link data about people to Bitcoin transactions. After receiving some feedback from Seedcamp mentors during the finalist week, we ended up spinning this product out as its own separate thing. This allowed us to sell not only to Bitcoin exchanges but also to estate agents, lawyers and others that had anti-money laundering requirements but no quick and easy way to meet these laws.
One of the clients from this business introduced us to Anthemis, one of the premier fintech VCs in Europe. We got to talking and they offered me a Fellowship. I was feeling ready to move on to something new and as a Fellow I was given the time and resources to figure out what I wanted to do next. At that time in late 2015, Ethereum was just becoming more usable and so I got back to coding and learning about building distributed applications on the Ethereum blockchain. That Fellowship project eventually became what Ohalo is today.
Ohalo started in earnest in late Spring 2016 when we finished the prototype for the blockchain-based Data Protection Router. Although we were successful in deploying to large bank clients we wanted a way to make this very easy to implement. So, after these initial successes, we were invited to be part of the 500 Startups in San Francisco. There we got back to basics and were laser-focused on how to make the Data Protection Router easier to implement. We started conducting interviews with our ideal customers, those that work in implementing technology for data governance. This meant getting in touch with a lot of chief data officers (CDOs), CISOs and COOs. Most of these people were responsible for governing how data moves across potentially thousands of databases and services. From these interviews, we identified the top three issues aligned very cleanly. They were data access/erasure/rectification (checking the box for the regulator), data lineage (finding out where the data is so you can check the box for the regulator), and identifying where sensitive data is in the first place (identifying data so you can trace its lineage).
Although the Data Protection Router did the first two items fairly well, we hadn’t built out functionality for sensitive data discovery. That is where the Data X-Ray came in. It is a tool that can be rolled out in minutes and having just launched it with customers recently, they love it so far.
It is this kind of validation that makes the entrepreneurial life great. For me, this is driven by solving real problems that real people have. Finding ways to discover those problems and building great solutions that make their lives easier. While it is definitely not the easiest life and there are sleepless nights of downs, the ups are great. I am fortunate to have an amazing and understanding wife that has gone through this with me and my co-founders in both my companies are friends for life. These human connections make it all worthwhile. I can’t imagine how single founders operate!
Ohalo is part of Batch 22 from 500 Startups and you are also part of the collective that formed the 22x Fund – how exciting does it feel to be part of this initiative? And do you see this as the future of funding for early-stage companies?
I think 22X Fund is pioneering the way that early-stage start-ups will fund themselves going forward. We are already seeing great technology being funded by ICOs that use blockchain to incentivise a base of fans to crowdfund fairly low-level protocol technology. But it is still super early days. 22X is one of the first security tokens. A security token is backed not by a utility in a blockchain protocol but by the equity of the companies participating. What this means is that passionate people now have a way to fund not only protocol-level technologies but also companies that are solving problems at a higher level.
Before, if you wanted to fund these kind of companies, you could either try your hand at angel investing, where deal flow and portfolio diversification is really hard, or you could give your money to a VC as an LP, where you still might deal with the same angel issues, but you get to give the VC 2-3% management fees yearly, 20-30% carry fees on profit, and your money is locked up for 10-15 years… not a very good deal. 22X is one token with very low fees, 30 highly vetted diverse companies that graduated from one of the top accelerators in the world (500 Startups), and almost instant liquidity.
How often do you keep in contact with the other members of 22x and, aside from fundraising, what are the other advantages of having gone through this process together?
We keep up with each other on an almost daily basis, whether that is just through Slack or on a quick phone call. One of the great benefits of building this idea together was collaborating with so many other great founders. Even after the Batch 22 ended, we remain 30 strong companies that help each other out, whether it is investor and client intros or just asking about successful methods to increase client lead generation. We are friends for life now!
You mentioned you’ve lived and worked in Silicon Valley, Tokyo and now London. How do the tech/start-up ecosystems differ?
They are very different. Of course, from an industry perspective they all have their focuses: Tokyo has a deep ecosystem for gaming, agri-tech, and robotics; London obviously exceeds in fintech; and San Francisco is unlike anywhere in the world for the depth of B2B and B2C businesses that have developed out of there.
I think that one of San Francisco’s most important assets and why it has been so successful is the large network of entrepreneurs and the culture of collaboration. As long as you obey the etiquette, you can ask for coffee with anyone there. You are never more than two hops across your network away from people that you want to talk to. I haven’t seen this openness to just listen to early-stage entrepreneurs anywhere else in the world.
What’s next for Ohalo? Will you be looking for further funding?
Yes, we are actually closing a seed round now in concert with the 22X Fund. We are almost finished with subscriptions but could probably fit one more investor in if any of your readers wants to reach out! Following that, stay tuned for more news…!