India is fast emerging as a key global cybersecurity product development hub. That cybersecurity startups witnessed close to $500 million of investments in the last four years, with a year-on-year growth of 88 per cent, shows how fast the country is catching up on the new opportunity.
The revenues of cybersecurity firms have witnessed a four-fold growth over the past four years. The space registered a compound annual growth rate (CAGR) of 39 per cent as the revenues grew to $1,060 million in 2020 from $275 million in 2016, reflecting huge demand for cybersecurity products and services in the country.
“The funding landscape has witnessed consistent growth. However, it dropped significantly due to the pandemic,” a Data Security Council of India (DSCI) report has said.
The report, Indian Cyber Security Product Landscape 2.0, highlights the sharp growth in the cybersecurity ecosystem in the country. The interest among entrepreneurs, according to the report, is such that the majority of the start-ups are bootstrapped, with co-founders rushing to tap the potential by putting in personal assets and raising crowd-funding to start off.
Another important factor is the size of the domestic market for cybersecurity has doubled, with 63 per cent of the product revenue coming from India. “North America is the second largest contributor with a share of 16 per cent,” said the report.
Global market size
The pandemic seems to have impacted the global growth of the industry. The report forecast that the overall cybersecurity product market would be at $59.5 billion by the end of 2021, against the earlier $58.9 billion.
“With the onset of the pandemic the growth rate has slowed down but managed to remain positive. The pandemic is driving short-term demand in areas such as cloud adoption, remote working technology and cost optimisation,” it said.
“The response to the crisis continues to impact department budgets and limit resource functions that are less essential for business continuity. This situation is estimated to direct spending in the fiscal year 2021 as well,” it said.
Budget constraints will continue to haunt cybersecurity firms next year, said the report. “The product refresh rate is estimated to decrease in order to address budget constraints, CISOs (Chief Information Security Officers) are considering extending the usage of security applications before upgrading, especially for hardware based products,” it added.