China is leading an internet society where economic and public activities are increasingly taking place online. In the process, pieces of civil and government data are transferred to cloud servers, raising concerns over information security. A startup called ThreatBook sees an opportunity in this revolution and pledges to protect corporations and bureaucrats against malicious cyber attack.
Antivirus and security software have been in China for several decades, but until recently, enterprises were only buying them to fulfill compliance requests, Xu Feng, six-year-old Threatbook founder and CEO, told ClearTips in an interview.
From around 2014, Internet usage began to expand rapidly in China, ushering in an explosion of data. The information previously stored in the physical server was going to the cloud. Companies felt that cyber attacks could cause financial losses and began to seriously focus on security solutions.
Meanwhile, cyberspace is emerging as a battleground where there is competition between states. Malicious actors may target the country’s important digital infrastructure or conduct critical research from the university’s database.
“The amount of cyber attack between countries mirrors their geopolitical relationships,” observed XU, who monitors information security in Amazon China before finding the Threatbook. Prior to this, he was the director of Internet security at Microsoft in China.
“If two countries are allies, they are less likely to attack each other. China has a special place in geopolitics. In addition to its tension with other superpowers, cyber attacks from small, nearby countries are also common. “
Like other emerging SaaS companies, Threatbook sells software and charges membership fees for annual services. More than 80% of its current customers are large corporations in the finance, energy, internet industries and manufacturing sectors. Government contracts make up a small slice. With its Series E funding round closing 500 million yuan ($ 76 million) in March, Threatbook raised total capital of more than 1 billion yuan from investors, including Hillhouse Capital.
Xue declined to disclose the company’s revenue or valuation, but said 95% of the firm’s customers chose to renew their annual membership. He said the company had met the “initial requirements” of the Shanghai Board’s Star Board, China is on par with the NASDAQ, and would go public when the situation mattered.
“It takes 7-10 years for our peers to go public,” Xu said.
ThreatBook compares itself to Silicon Valley with CrowdStrike, which filed to go public in 2019 and detect threats by monitoring the company’s “endpoints”, which may be an employee’s laptop and mobile devices that Connects to the internal network from outside the corporate network.
Similar to ThreatBook is a suite of software that visits company employees’ devices, automatically detects threats and comes with a list of solutions.
“It’s like installing a lot of security cameras inside a company,” Xu said. “But the thing is that what we tell customers after issues are captured matters.”
Saa providers in China are still in the stage of educating marketers and lobbying enterprises to pay. Of the 3,000 companies that serve ThreatBook, only 300 are paying, so there is plenty of room for demonetization. The willingness to spend also varies among different sectors, with financial institutions happy to receive several million yuan ($ 1 = 6.54 yuan) a year while a tech startup only wants to pay a portion of that.
Xue’s vision is to take ThreatBook globally. The company had plans to expand overseas last year but was held back by the COVID-19 epidemic.
“We have made a handful of inquiries from companies in South East Asia and the Middle East. Even in markets with mature markets, we can have a place [cybersecurity companies] Like Europe and North America, ”said Xue. “A customer can consider us as long as we are able to offer differentiation, even if he has an existing security solution.”