How We Built a $3.6B Company in an Uncharted Industry

A few months ago, Oxylabs landed a $130 million investment from Warburg Pincus, pushing our valuation to $3.6 billion — the highest ever recorded in the public web data sector, and our first outside capital in more than a decade of doing business.

Back in 2015, when Oxylabs was launched, few had heard about automated web data access as a separate industry, and even fewer understood the underlying technology. There was no rulebook to follow, no regulatory framework that clearly applied and no seasoned executives to consult on intractable problems. 

Technology develops fast, and today there are plenty of similar avenues for innovation and companies carving out their own niche. So here are simple but hard-won lessons for everyone trying to build a category-defining company in an emerging, stormy industry.

Balance experimentation with the reliability of the core offering

Succeeding in a new industry requires a two-fold approach — frequent, bold experimentation and a dependable core product. To figure out what works, you need to be willing to try many different things, many of which will fail. But you can only afford some turbulence and freedom to experiment if the value of your core offering is unshakeable.

Customers will understand a few misfires, especially if you are building on top of novel solutions. But competitors can pop up just as quickly as client patience runs out when workflows or data pipelines break and cause significant downtime.

Establish a strong patenting system early

Experimenting and innovating is something you must do to claim your place in an emerging industry. Just as important is setting up a patenting system as early as possible. Next to your ingenious engineers, you need capable lawyers who will make their work worth that much more. Proprietary knowledge that no one cares about today will be priceless when everyone else starts to notice the opportunity in your sector. 

Beyond the legal protection, a proactive approach to patents forces your team to articulate exactly what’s proprietary and defensible about their approach in the first place. That clarity, in turn, helps you build a strategy to pre-empt — or at least soften — any disputes that arise later on.

Build for compliance and KYC before anyone’s checking

It might be tempting to treat the absence of clear regulation as an absence of responsibility. Prioritizing growth, revenue and competitive edge makes sense for an emerging company in an unclaimed industry. But if you are in for the long run, act like it from the get-go. Rigorous know-your-customer checks, use-case vetting and data protection should become part of your company’s culture from day one, even when it means turning away opportunities or moving slower than less scrupulous competitors. 

Trust built this way compounds over time. It gives credibility to attract investors and a solid backbone to pass due diligence. Importantly, if you are in an industry no one understands, and many assume it is shady, audits or regulatory inquiries will come without you doing anything wrong. Prejudice is only overcome by proof of responsible conduct. 

Push the whole industry toward self-regulation

A company can only outrun its industry’s reputation for so long. When shady players shape how regulators, the media and the public view a new category, every honest business in that category ends up paying for it. That’s why it often falls to the more responsible players to work together and lead the way. Joining or starting industry associations that set and promote common standards, and that certify companies willing to be held to them, is something companies can do without waiting for outside regulation.

In the web data industry, no such body existed until a group of companies came together to launch the Ethical Web Data Collection Initiative. It’s hard to build trust in your own business if the entire category is seen as untrustworthy, so investing in your industry’s credibility is one of the most impactful things a leader in the field can do.

Fiscal discipline beats early funding

Growing at a pace your infrastructure and compliance standards can support takes real discipline. Enticing offers might come early on. Capital investment early on gives you a head start, resources and time in the sun. But it can also become a burden.

Being fiscally responsible lets you raise funds only when you can do so on your own terms. Similarly, while acquiring a competitor has the appeal of a power move, it doesn’t necessarily make sense in current market conditions. Don’t buy just to demonstrate growth and attract investor attention. Buy to expand your market presence and product offering, and the investors will come to you.

Summing up

Building without a map is hard — failure lurks around any corner, and success is hard to envision, let alone reach. But being among the first also means you have plenty of room where you can build. And you get to help set the terms for how your industry operates and in what light it is judged. That kind of foundational work pays off down the line.

A few months ago, Oxylabs landed a $130 million investment from Warburg Pincus, pushing our valuation to $3.6 billion — the highest ever recorded in the public web data sector, and our first outside capital in more than a decade of doing business.

Back in 2015, when Oxylabs was launched, few had heard about automated web data access as a separate industry, and even fewer understood the underlying technology. There was no rulebook to follow, no regulatory framework that clearly applied and no seasoned executives to consult on intractable problems. 

Technology develops fast, and today there are plenty of similar avenues for innovation and companies carving out their own niche. So here are simple but hard-won lessons for everyone trying to build a category-defining company in an emerging, stormy industry.