As enterprises across sectors in India grapple with rising costs on account of data breaches, the need for robust security solutions has never been more urgent. The massive opportunity that this problem offers isn’t lost on enterprise security startup Sequretek.
“We always felt that with digital transformation becoming ubiquitous, security would either become an enabler or a roadblock. As it percolated down the value chain, there would be a need for more security products and solutions. The bottom half of the market was underserved and we believed if we could crack that part, we would be here to stay,” says founder and CEO Pankit Desai.
Nearly six years later, Desai finds himself vindicated to a great extent.
Today, the Mumbai based startup has more than 80 customers under its belt including HDFC Bank, Motilal Oswal, Federal Life Insurance and Aegon Life Insurance. It will soon be able to count off 150 customers following a recent tie-up with the Maharashtra State Cooperative Banks’ Association (MSCBA) to provide artificial intelligence (AI) powered security products and services for cooperative banks in the state.
Apart from India, Sequretek’s customers are spread across markets such as the US, Europe and the Middle East. In terms of sectors, while financial services institutions form a large base, it also has customers in pharmaceuticals, government, retail, logistics and manufacturing.
“When we started in November 2013, we generated revenues of Rs 20-30 lakh in the first four months. Customer acquisition was less of a challenge to us. What has worked for us is that every single technology that we've built, we always keep the customer in mind,” Desai says.
Ahmedabad-born Desai, who spent several years in the information technology sector across firms such as Wipro, IBM India and Rolta India, founded Sequretek with former Symantec managing director for India and SAARC Anand Naik. The two struck up a close friendship while working at IBM and later went on to become brothers-in-law.
After years of dealing with the complexities of enterprise security at their previous jobs, they decided to channel their experiences to come up with a vision to simplify security. At Sequretek, Naik is all about product, vision and execution and Desai looks after sales and operations.
Security for next generation enterprises
“As you move down the value chain in any sector, security problems are more grave at the bottom than it is at the top of the line companies,” says Desai.
He breaks it down further. Conventionally, he explains, enterprises operate within secured perimeters and network defenses. The general idea is that the perimeter is strong, even while the constituents systems are not. “Effective until very recently, this model has started taking hits on many fronts. For starters, data centres are quickly migrating to cloud infrastructure, minimizing ownership and control. This has the company’s critical assets spread all over the internet. The safety of a ‘perimeter’ thus dissolves,” he says.
Second, as more and more employees started working from outside the office, they break out of the secure perimeter and open themselves to threats. Finally, businesses no longer function on a ‘transaction only’ model with customers. The integration has evolved into a value-chain driven process, creating several business and customer touchpoints.
“Therefore, it is becoming increasingly difficult to ensure equal security at every layer,” he says.
In order to address the security concerns at all three layers, Sequretek has leveraged emerging technologies to develop three products. The first product, EDPR (endpoint detection protection response) is an AI-based technology for endpoints and servers that can detect threats, protect against those threats and provide an end-to-end response mechanism.
The second product, IGA (identity governance and administration) is an end-to-end employee access lifecycle management solution for enterprises. The third, MDR (managed detection and response) is an AI and Big Data based security solution with automated threat detection, analytics and response.
But what really worked for the company is its approach to product development. “We are not believers of building a technology in the lab and then finding a customer. We believe in finding a customer with a problem and then working for them,” Desai says. Sequretek employs a subscription-based revenue model. The devices are priced on a per-module-per-year basis.
Challenges, competition, funding
The journey over the last six years hasn’t been without its ups and downs. “This industry is seeing a new generation of players every few years. Lot of churn happens in this industry. If you are around for a long time, you become jaded. So a new company coming in with fresh thinking, there is space to grow. Being nimble is our differentiator,” says Desai.
The biggest challenge that he and Naik faced as founders of Sequretek was to sell to new-age companies. Attracting talent has also been a challenge at times. “We hire a lot of freshers and make them cybersecurity professionals in around three months. We have figured out how to make them field ready,” he says.
With a headcount of 350, the startup claims to have been operationally profitable for the last three years and is looking to double its revenues this year. “For the next three years, 100% growth looks visible,” he says. The company has also set up its first set of distributors in Africa, the Middle East and Southeast Asia.
The market size for cybersecurity, by Desai’s estimates, in India is $1.5 billion and over $100 billion globally.
The company last raised funds in September 2018 when it raised around $3.7 million in a bridge round led by Mumbai-based venture capital firm Unicorn India Ventures. Existing investors GVFL, earlier known as Gujarat Venture Finance Ltd, Sharad Sanghi, founder of data centre company Netmagic Solutions and a clutch of international investors also participated in the round.
“Sequretek is serving the need of new age businesses. Their products are business centric, which protects enterprises from malicious cyber threats. While we had been investing in technology businesses, we realised the need for such a product based company that addressed cyber threats and Sequretek fit the bill,” Anil Joshi, managing partner at Unicorn India Ventures, said.
According to Desai, the company is plans to hit the market for more funding next year.