Cyber security start-ups attract big funding

Funding in cyber security start-ups in India have seen an exponential increase in the last five years as the risk of cyberattacks increase leading to focus on data privacy and more awareness, say industry players.

This has made many venture capital (VC) firms focus on start-ups in the cyber security as enterprises are beginning to put in place infrastructure to protect themselves from cyberattacks.

According to the data provided by start-up tracker Tracxn, number of cyber security start-ups founded in 2016 was 30, a 50 per cent jump compared 2012 when it was 15. Investments during the period saw an exponential jump as well, from $1 million during 2012 to $67 million in 2016. Investments in 2017 stood at $100 million.

Network Intelligence, a cyber security firm, recently got a funding of $4.8 million from PE firm Helix Investments. Hyderabad-based firm Ensurity Technologies is in talks with VCs to raise funding for its expansion plans. According to a venture capitalist, the firm is currently funding four start-ups in the security space given the high level of relevance they have right now.

India was one of the worst-hit countries by the WannaCry ransomware affecting sectors such as banking, finance and manufacturing last year.

According to the information provided in the Indian Computer Emergency Response Team (CERT-In), two lakh cyber security incidents were noted between 2014 and 2017. Over a period, the nature and pattern of incidents are becoming more sophisticated and complex. The type of cyber security incidents includes phishing, scanning/probing and virus/malicious code.

Amit Mathur, Chief Operating Officer, Ensurity Technologies, agreed that market for cyber security services is increasing as the risk of cyber attacks is on the rise. “But, India is slow in its adoption,” Mathur said. The company is working with banks for its integrated payments system and also looking to expand overseas.

Data privacy laws

Additionally, cyber security firms believe that data privacy laws that are taking national priority will also boost the demand for such products and services. European Union recently implemented General Data Protection Regulation (GDPR) to ensure its citizens privacy. Vietnam too implemented its own data privacy law. In India, it is in draft stage and expected shortly.

These too will drive demand for cyber security services. For instance post GDPR implementation, Ensurity Technologies saw huge demand for its secure USBs that offer biometric authentication, encrypted storage and read-only operating system for secure remote access overseas.

The company is in talks with companies in the US and Europe for the product. Mathur said that the demand is only going to increase in the coming years.

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