What's Holding Back India's Security Startups?

Entrepreneur

a day ago

Investors worry about Indian entrepreneurs' ability to scale such a business internationally. There's also a lack of clarity on monetisation models and whether India can produce disruptive cybersecurity products for the world, says Srinivas Shekar, Co-Founder of Pantherun Technologies
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The cybersecurity industry took a dramatic turn after the pandemic. With a sharp rise in malicious cyber activities, the demand for robust cybersecurity solutions has skyrocketed globally.
According to estimates, the global cybersecurity market size was valued at USD 143.55 billion in 2024 and is projected to reach USD 225.21 billion by 2030, growing at a CAGR of 7.6 per cent during the period. On the other hand, India's cybersecurity market, as per IMARC Group, stood at USD 9.8 billion in 2024 and is expected to grow to USD 36.8 billion by 2033, exhibiting a CAGR of 15.8 per cent nearly double the global rate.
Yet, despite this promising outlook, some investors paint a more sobering picture.
"In India, there are over 1,400 cybersecurity companies, but only 235 are funded, and just 13 have reached Series B," said Prayank Swaroop, Partner at Accel. He believes India has the potential to mirror its SaaS success in the nearly USD 400-billion global cybersecurity market, but only if founders commit to playing the long game.
So, what's stalling the funding momentum?
Deepak Gupta, General Partner at WEH Venture Partners LLP, attributes it to market structure and global readiness. "In fintech, India has a large domestic TAM (Total Addressable Market), which can be largely served by domestic companies, hence the funding. In contrast, SaaS is a broader category than cybersecurity, and only countries with deep, specialised expertise like Israel tend to attract larger funding in this space," he noted.
Meanwhile, Srinivas Shekar, Co-Founder of Pantherun Technologies, believes investor hesitation stems from a mix of uncertainty and complexity. "Interest in cybersecurity is definitely growing, but it's still catching up to the traction we see in SaaS and fintech. These sectors have well-established growth patterns and proven exits, which make it easier for investors to jump in. Cybersecurity is often seen as more technical and harder to evaluate," he said. "That said, the tide is turning. Investors are beginning to recognize the value proposition and the need for innovation in cybersecurity."
Key investor concerns
According to Gupta, a fundamental issue is that India has traditionally been a laggard in adopting cybersecurity solutions, making it harder for startups to gain traction domestically before going global. "Unlike the SaaS wave a decade ago,where Indian companies sold products 60 per cent cheaper via telesales, cybersecurity purchases, especially in mature markets, are complex and not just cost-driven. Enterprises already have around 40 cybersecurity products in their stack. So yet another point solution may not be compelling," he explained.
Shekar agrees that scaling globally is a challenge. "Investors worry about Indian entrepreneurs' ability to scale such a business internationally. There's also a lack of clarity on monetisation models and whether India can produce disruptive cybersecurity products for the world," he said.
Shekar adds that mature markets like the US and Europe show much higher adoption, primarily driven by proactive enterprise behaviour around compliance and data protection. "Governments in Europe are even framing laws to make cybersecurity mandatory, accelerating the industry's growth."
Still, Shekar remains optimistic about India's trajectory. "There's increasing awareness about the importance of cybersecurity, and we're seeing more structured interest and adoption from forward-looking Indian companies. The momentum is picking up steadily."