In contrast, international security firms are opening shop around or expanding their products in a business that is poised for development.
At least nine security startups have raised money since August last month, according to business data cleverness platform Tracxn. Six were seed sessions and three were Series-A.
Equal, an identity management platform, raised the most at$ 10 million, followed by Protectt. ai, a mobile app surveillance system at$ 8.7 million, and Astra, a cloud-based piercing screening platform at$ 2.7 million. The owners included high-profile companies Blume Ventures and Bessemer Venture Partners.
” Till 2023, cybersecurity was considered a cost centre as the AI space was still maturing”, said Munish Vaid, vice president ( digital transformation &, technology ) at Primus Partners India. ” It was considered a backroom IT work. It’s not the event any longer. Nowadays it’s a concern for companies”.
Indian companies are expected to spend$ 3.3 billion this year on network security, security services and security software, a 16.4 % uptick from the year prior, according to a Gartner forecast. The highest rise in investing is expected on surveillance service, at$ 1.6 billion.
Gartner points out that that two trends are likely to play out over the course of the time: conceptual AI’s effect on data security, and the transition to a focus on digital resilience, acknowledging that virtual incidents are a matter of “when, no if”.
Beyond antivirus
Security is no longer simply about setting up measures, firewalls and ranges of malware-detecting password. It’s moved into the realm of AI, where cloning tones, creating deepfakes and manipulating text is becoming more popular.
Last year, Bharti Enterprises CEO Bharti Mittal narrated at the NDTV World Summit how scammers cloned his voice in an attempt to obtain his helper to move a large amount of money.
“ Newer threats are emerging, newer solutions, and needless to say, new investment opportunities”, said Vikram Ramasubramanian, partner at Inflection Point Ventures, which led the$ 600, 000 pre-seed investment round in Neural Defend, a deepfake detection company.
Some of the pick-up in revenue can be attributed to the president’s Digital Personal Data Protection Act. While the law has been passed, the rules are being finalised and are expected to be out this season.
” With the government’s very India-centric thinking where there is a basic rethinking of information management and data privacy, that creates a lot of opportunities for local people”, said Krishna Mehra, AI companion at Elevation Capital.
For these cybersecurity startups, the competitive edge lies in building out technologies that the larger companies aren’t focusing on.
” There are new use-cases like red teaming, model poisoning prevention, agent governance and more that are AI-first use-cases which are emerging and giving Indian founders new categories to play in and not necessarily compete with existing vendors”, said Prayank Swaroop, a partner at Accel.
The bottom line is that companies are now looking at enhancing security for their AI-led operations primarily because user data hangs in the balance. For organisations, the primary concern is staying ahead of malicious actors using generative AI for phishing attacks and injecting malware into systems.
That’s why, at least in India, machine learning, generative AI security, and cloud security top the list of priorities for cybersecurity companies, according to a joint Nasscom-Data Security Council of India report. It’s why Protectt. ai is building its own AI security platform, which is slated for an August-September launch, as Mint previously reported.
Enter the foreigners
While Indian companies are working to enhance their capabilities and enter the growing market, foreign firms too have sniffed out the opportunity.
Arctic Wolf, Rubrik, ESET, Operant AI and Check Point Software have either announced expansion into India or are deepening their partnerships within the country.
” What drew us to India was, initially, conversations with security leaders working for US companies out of India. But we soon realised Indian enterprises themselves, especially in fintech and banking, face the same challenges around secure AI deployment”, said US-based Operant AI’s co-founder and chief executive Vrajesh Bhavsar.
The company recently announced it will expand operations into India.
US-Israeli cybersecurity firm Check Point Software, which has been in India since 2003, opened its second-largest global office in Bengaluru last year which will focus on R&, D, it’s first in the Asia-Pacific region.
” With the increasing demand for advanced cybersecurity solutions, India will continue to be a significant growth driver”, said managing director for India and South Asia Sundar Balasubramanian.
US cybersecurity firm Arctic Wolf also set up its global capability centre in Bengaluru last year. At the time, the India GCC was meant to “accelerate the development of advanced ML models and AI-driven cybersecurity detections within its platform”, a company executive told Hindu Businessline. Arctic Wolf has now expanded its GCC operations in the country to tap the talent pool here.
What is common for cybersecurity startups and larger companies is their market. Both operate primarily in the banking, financial services, and insurance ( BFSI) sector, where attacks have the most direct and fastest impact on money.
” Our primary targets are sectors where AI adoption is critical to business performance but must comply with data privacy mandates—like banking, fintech, insurance, and enterprise SaaS”, said Bhavsar of Operant AI.