Venture capital (VC) funds are increasingly turning their attention to cybersecurity startups and deploying specialists to evaluate potential investment bets amid rapid growth in the sector fuelled by the rise of artificial intelligence (AI) and escalating concerns over data security.
Risk investors are recognising that the sector’s complex and technical nature demands more than a generalised technology expertise, said industry executives and experts.
“More VCs are setting up teams dedicated to cybersecurity. There is high demand, especially with AI in the picture. More cases of phishing and sophisticated cyberattacks and hacking incidents are being reported,” Prayank Swaroop, AI, cybersecurity and cloud partner at Accel, told ET, adding that Indian startups in this sector are gaining greater visibility.
Swaroop is leading cybersecurity investments at the fund, which has backed six startups in this sector — Akto, Seezo, Securden, Sprinto and ProjectDiscovery.io.
Several other funds are either putting in place dedicated teams or bringing domain specialists to work alongside their investment teams when evaluating opportunities. Cornerstone Ventures, an early-stage VC fund in the process of writing its maiden cheque in cybersecurity, is using this approach.
Early-stage fund Endiya Partners, which has backed cybersecurity startups such as Shield Square and Scrut Automation, has dedicated a couple of partners to focus on the sector, including managing partner Sateesh Andra.
Pankaj Mitra at Bessemer Venture Partners is leading cybersecurity for the fund.
Cornerstone Ventures managing partner Abhishek Prasad said one of the partners, who has a background in cybersecurity, acts as a subject matter expert for these pitches. “It’s important to understand that this space is quite technical and it's important to understand specific moats or differentiators of every platform when evaluating an investment. It's even more critical that any investment we make can adapt to changing technology innovations (especially accelerated by AI),” he said.
Founders seeking to raise capital told ET that VC investors bring along experts when evaluating their pitches. “When investors come to meet with us, they bring along someone with domain knowledge. These can be members of their teams or some advisors,” said the founder of a cybersecurity startup, who did not wish to be identified. “This is not just about revenue multiples, but about understanding the product as well.”
Vijendra Katiyar, CEO of cybersecurity startup Clean Start, said funds, especially in the US, have a panel of experts, like chief information security officers, whom they consult. “If they have to look at investing in a certain product, they involve the panel to evaluate the pitch or startup. Sometimes, they also consult founders in the space who are part of their portfolio,” he said.
While the sector is booming, it is still at a nascent stage in India, according to investors.
“You cannot make a career of investing in cybersecurity startups in India yet. We are still waiting for a ‘Freshworks’ moment,” Swaroop said.
Cornerstone Ventures’ Prasad agreed, saying that the ecosystem is still warming up to the sector and that India has “historically not been a first mover in the space as such”.
India is home to 1,445 cybersecurity companies, of which 235 have collectively raised $1.1 billion in funding, according to data shared by Accel. One of the biggest exits in the segment occurred when American cybersecurity firm SentinelOne acquired Bengaluru-based Pingsafe in a $100 million deal. Besides, two Indian cybersecurity companies, Quick Heal and Emudhra, went public in February 2016 and May 2022, respectively.
Cybersecurity startups have raised $38.5 million till July 2025 and are set to cross $41.9 million scooped up last year, the Accel data showed.
On July 31, cybersecurity intelligence startup Safe Security raised $70 million in a funding round led by Avataar Ventures, with participation from Susquehanna Asia Venture Capital, NextEquity Partners and Prosperity7 Ventures. In May, predictive cybersecurity Cloudsek raised $19 million in funding led by Tenacity Ventures and Commvault.
Risk investors are recognising that the sector’s complex and technical nature demands more than a generalised technology expertise, said industry executives and experts.
“More VCs are setting up teams dedicated to cybersecurity. There is high demand, especially with AI in the picture. More cases of phishing and sophisticated cyberattacks and hacking incidents are being reported,” Prayank Swaroop, AI, cybersecurity and cloud partner at Accel, told ET, adding that Indian startups in this sector are gaining greater visibility.
Swaroop is leading cybersecurity investments at the fund, which has backed six startups in this sector — Akto, Seezo, Securden, Sprinto and ProjectDiscovery.io.
Several other funds are either putting in place dedicated teams or bringing domain specialists to work alongside their investment teams when evaluating opportunities. Cornerstone Ventures, an early-stage VC fund in the process of writing its maiden cheque in cybersecurity, is using this approach.
Early-stage fund Endiya Partners, which has backed cybersecurity startups such as Shield Square and Scrut Automation, has dedicated a couple of partners to focus on the sector, including managing partner Sateesh Andra.
Pankaj Mitra at Bessemer Venture Partners is leading cybersecurity for the fund.
Cornerstone Ventures managing partner Abhishek Prasad said one of the partners, who has a background in cybersecurity, acts as a subject matter expert for these pitches. “It’s important to understand that this space is quite technical and it's important to understand specific moats or differentiators of every platform when evaluating an investment. It's even more critical that any investment we make can adapt to changing technology innovations (especially accelerated by AI),” he said.
Founders seeking to raise capital told ET that VC investors bring along experts when evaluating their pitches. “When investors come to meet with us, they bring along someone with domain knowledge. These can be members of their teams or some advisors,” said the founder of a cybersecurity startup, who did not wish to be identified. “This is not just about revenue multiples, but about understanding the product as well.”
Vijendra Katiyar, CEO of cybersecurity startup Clean Start, said funds, especially in the US, have a panel of experts, like chief information security officers, whom they consult. “If they have to look at investing in a certain product, they involve the panel to evaluate the pitch or startup. Sometimes, they also consult founders in the space who are part of their portfolio,” he said.
While the sector is booming, it is still at a nascent stage in India, according to investors.
“You cannot make a career of investing in cybersecurity startups in India yet. We are still waiting for a ‘Freshworks’ moment,” Swaroop said.
Cornerstone Ventures’ Prasad agreed, saying that the ecosystem is still warming up to the sector and that India has “historically not been a first mover in the space as such”.
India is home to 1,445 cybersecurity companies, of which 235 have collectively raised $1.1 billion in funding, according to data shared by Accel. One of the biggest exits in the segment occurred when American cybersecurity firm SentinelOne acquired Bengaluru-based Pingsafe in a $100 million deal. Besides, two Indian cybersecurity companies, Quick Heal and Emudhra, went public in February 2016 and May 2022, respectively.
Cybersecurity startups have raised $38.5 million till July 2025 and are set to cross $41.9 million scooped up last year, the Accel data showed.
On July 31, cybersecurity intelligence startup Safe Security raised $70 million in a funding round led by Avataar Ventures, with participation from Susquehanna Asia Venture Capital, NextEquity Partners and Prosperity7 Ventures. In May, predictive cybersecurity Cloudsek raised $19 million in funding led by Tenacity Ventures and Commvault.
