What do your bank, your neighbour’s bank, your last order from your favourite e-commerce site and a large IT MNC have in common? Well, all require cybersecurity for protection from the ever-rising danger of cyber snooping and data leaks.
One of the major headaches a lot of companies, especially in banking and financial services, face is the large number of regulatory security requirements that they need to fulfil. It results in multiple security products, different forms of access based on employee roles and varied levels of security, even for accessing the company networks. With a background in network security, Kanwal K Mookhey saw an opportunity to help businesses consolidate all of the above solutions and also manage them.
Bengaluru-based cybersecurity solutions provider Network Intelligence recently raised Rs 330 million from private equity firm Helix Investments, wherein the company was valued at a little over Rs 1,550 million.
Kanwal K Mookhey, Network Intelligence founder
Varun Didwania, director at Helix Investments, said, “With the fast pace of digitisation in India, the need for cybersecurity services is only going to go up.”
The company offers different forms of managed security services, apart from partnerships with major technology players like IBM, Microsoft and HP. While the company was founded in 2001 and has established itself among BFSI clients as far as West Asia, this was the first fundraiser for the entirely bootstrapped company.
Network Intelligence offers two primary products: Insight that helps manage assets, assess their vulnerabilities, determine compliance status, and adopt an effective workflow to address the discovered vulnerabilities so that it does not affect your organisation. FireSec helps firewall rulebase analysis in medium to large enterprise environments.
“These technologies are complex and skillset availability is low, but companies
are investing increasingly in security solutions. So our products help to create a clear interface between all the solutions and optimise the configurations,” said Mookhey.
Almost 60 per cent of their customers are from the BFSI sector, followed by oil & gas as well as IT and ITeS companies.
Subscriptions are mostly based on annual contracts ranging from one to three years duration. The company also specialises in providing General Data Protection Regulation (GDPR)-based security solutions for clients that have a base in the European Union. The company also offers managed security services to clients apart from audit facilities.
“Since we have been bootstrapped from the beginning, we had to turn profitable very early on. We have always been focused on getting long-term projects which constitute 70 per cent of revenues,” he adds.
But why would a company that has been around since 2001 look for funding 17 years into the business when you are already growing at 30 per cent compound annual growth rate (CAGR)?
“De-risking became a primary focus for us. We are looking at product development as well as seeking to hire on-site in the US, West Asia, etc,” he said. He adds that investments in these areas tend to be riskier and the company wanted to grab the opportunity head on, instead of waiting for incremental investments from their profits within a certain time frame.
The key challenges for the company so far have been winning new business, maintaining cash flow collections and building scale without sufficient funding in the initial years. The launch of its in-house training division which has helped the firm meet talent needs. Since it started receiving traction from their client base, it was able to rapidly expand into other geographies.
Mookhey puts maintenance of quality service as the top priority in the long-run while continuously upgrading skill. “Obviously, making relevant products will be the top priority for us. Maintaining a CAGR of 40-50 per cent while holding on to a healthy Ebidta of 20 per cent is definitely a medium-term goal. Most importantly we will continue to build the business into a strong brand,” he said.
Paras Chandaria, Chairman, UST Global
Expert take: Customer intimacy is key; invest in best cyber experts
I see three factors that will be key to a successful expansion of Network Intelligence’s play into international markets. The first is customer intimacy: Do whatever it takes to ensure you have happy, referenceable clients. Getting close to customers means having a deep understanding of their problems today and anticipate the challenges they will face tomorrow. Make yourselves a trusted adviser, become an extension of the client’s team, and provide key performance indicators (KPIs) by which you will be measured.
Second, invest in the best cyber experts that will infuse a security mindset into the culture of the company. This is not easy, but you need the best people who will bring an innovation mindset into everything you do. Finding good cyber specialists is a big challenge, so consider extending your hiring net across multiple geographies.
Third, you must invest heavily in technology (IP) in-house to develop your expertise. Automation and AI are buzzwords that help valuations, but if you do them properly, they will help you to scale your operations, create internal efficiencies, and pass on those savings to your customers. And finally, ensure to continuously disrupt yourselves because the pace of change in cybersecurity is rapid and relentless. From the investor perspective, there should be a complete alignment of objectives and a total transparency to make it a successful long-term partnership.