Privacy Becoming Next Bet For VCs

When a venture capital firm with the heft of Kleiner Perkins Caufield & Byers starts putting money into your privacy startup, you've clearly picked the right business.

As the pitfalls and security gaps of lives lived increasingly online become more evident, companies that seek to shore up data security and keep private information private have become a growth industry. And deep-pocketed venture firms want a piece of the action.

The Wall Street Journal reported that ReputationDefender Inc. will announce a new $15 million round of fundraising before the end of the month. And the Financial Post noted that Truste, a San Francisco-based provider of website privacy certification services, last week closed a $12 million second round of financing from a group led by Jafco Ventures, with participation from DAG Ventures, Baseline Ventures and Accel.

"Privacy is a big issue and it's going to get bigger because people realize it can be used against you," Ted Schlein, a principal at Kleiner Perkins who sits on the board of ReputationDefender, told the Journal. "That spells market opportunity."

Fast Company reported that the private sector's leap into privacy-related businesses will also be followed by a government initiative to update legislation covering online personal information, a move that will likely affect Google and Facebook.