Listen to this article 4 min
Arlington data privacy startup WireWheel has been acquired by competitor Osano in a rare exit for a Greater Washington company this year.
The 7-year-old company's software helps large companies abide by countries' varying privacy regulations, and Austin-based Osano said WireWheel’s data privacy tools “will be fully integrated into the Osano platform,” according to a press release Tuesday announcing the deal.
Terms of the sale were not disclosed.
Osano had sought to acquire WireWheel once before but the latter rejected the overture because it already had its own strong lineup of investors, Osano CEO and co-founder Arlo Gilbert told the Austin Business Journal.
"They were doing well and they had a good company," Gilbert said. "They had great investors like NEA and so he kind of told me to pound sand."
Indeed, WireWheel has attracted investment from some of the largest and best-known venture capital firms in the region, including Chevy Chase's New Enterprise Associates, D.C.-based Revolution’s Rise of the Rest fund, Arlington’s Sands Capital Ventures and Arlington’s Grotech Ventures. PSP Growth — the venture capital arm of Chicago investment firm PSP Partners, founded and chaired by Penny Pritzker, former Commerce secretary under President Barack Obama — was also an investor.
WireWheel founder and CEO Justin Antonipillai was former acting under secretary for economic affairs at the U.S. Department of Commerce under President Obama while Pritzker led the agency.
In all, the Arlington company had raised about $44 million in outside funding in its lifetime — roughly the same amount that Osano has raised to date, according to reporting by the Austin Business Journal.
"I'm kind of coming in and getting to buy a company that, at one point in time, I saw as somebody to aspire to emulate," Gilbert told ABJ. “And so that's really exciting. I think it's a little bit like getting to meet your favorite musician — or, better yet, more like getting to play on stage with your favorite musician."
The deal came together after the management teams met and concluded that the companies would be stronger together. This is the second acquisition in Osano's history, and Gilbert said he is eyeing others.
Exit activity — defined as companies going public or being acquired — is down so far this year as economic uncertainty, rising interest rates and global conflict have led to many startups adopting a “wait and see” approach. Locally, the combined value of companies making exits in the third quarter was $22.02 million, compared to $622.97 million in the same period last year, according to data from PitchBook, making WireWheel's move one of relatively few exit moves seen this year.
A spokesperson for Osano declined to share WireWheel or Osano’s revenue for the past year, but said Osano’s revenue has grown at a pace of more than 100% per year for the past five years.
WireWheel will maintain its independent brand for the time being, the spokesperson said, although that may change in the future. Osano plans to retain WireWheel’s footprint in the D.C. and Northern Virginia region.
It’s less clear, however, whether WireWheel’s leadership team will continue to play a role in the combined company going forward. Most of its employees have been integrated into Osano but there were some layoffs, the spokesperson said. Osano has about 90 employees today, up from 45 a year ago.
“We have been working closely with the WireWheel leadership team during the acquisition and transition process,” the spokesperson said. “As is often the case with acquisitions, there will be some redundancy in leadership roles going forward.”
At least one of the original members of WireWheel’s leadership team has already departed. D.C. electric vehicle leasing startup Inspiration Mobility announced last year that it had poached WireWheel co-founder and chief product officer Chris Getner as its new chief technology officer.
WireWheel was a 2020 D.C. Inno on Fire honoree.
