India will have 50 bn digital identities in 5 years: LoginRadius CEO Rakesh Soni
LoginRadius, a cloud-based customer identity management platform, raised $17 million last month in a Series A funding round from cybersecurity-focused venture capital firm ForgePoint Capital and Microsoft’s venture fund M12. What lies behind this large fundraise is a young startup with a thriving global tech business which, at present, has offices in six countries.
Founded in 2012 by Deepak Gupta and Rakesh Soni, Jaipur-based LoginRadius initially started out by offering users a social login application, which involves using a single sign-in for multiple platforms like Facebook, Twitter, etc. The firm then evolved into a full-fledged customer identity and access management (CIAM) platform, which is driven by artificial intelligence. It offers a cloud-based software-as-a-service (SaaS) platform that helps businesses, such as Amazon, Mozilla, and Microsoft to name a few, to manage and secure their customers’ digital identities.
While the company’s primary focus is currently on the North American and European markets, co-founder Soni, who is the chief executive of the venture, says the opportunity in India is boundless. In an interaction with TechCircle, he spoke about market opportunities, the company’s strategy, competition, and much more.
Where will you invest the fresh funds and what’s the runway you expect with it?
We raised this capital to accelerate our growth. The company will primarily invest in customer acquisition and product innovation. Hence, we aim to grow our headcount by 300% in the next 18 months. We achieved profitability in 2017 but with heavy investments, we expect to have runway for 24 months and to hit profitability again in 18 months.
Some renowned investors have invested in LoginRadius in this round. Can you share how they all came on board?
We joined Microsoft’s accelerator programme in December 2016 and we have been on their Azure cloud platform since our inception. This gave us a great opportunity to learn more about Microsoft and vice versa, and we both realised the alignment between the two companies.
We’ve been getting strong visibility in the identity space. This has put us on the radar of many venture capital firms and they have been reaching out to us. Eventually, we saw an alignment with ForgePoint because of their cybersecurity focus and network. We feel these two firms can add immense value to our growth plan.
What synergies do you look to achieve with your new set of marquee investors?
Both our new investors add unique value to our business. Microsoft’s involvement will give us access to their massive partner and customer ecosystem, which will allow us to acquire clients globally. We will also be able to work closely with Microsoft on various technology fronts particularly on Azure, artificial intelligence and security.
ForgePoint gives us access to their huge network of security professionals and market insights and this allows us to share our product map and business strategies.
What is the scale of your operations at present?
We have a global presence with offices in Vancouver, Jaipur, San Francisco, London and Sydney. We want to expand our operations in these five locations and open 2-3 more offices to support the demand.
What market opportunity is LoginRadius chasing in India?
At present, most of our clients are from the international markets. However, we do have some major customers in the Indian market. We expect Indian companies to accelerate their adoption of cloud technologies in the coming years and that’s when the demand for CIAM will become significant. We will continue to identify and meet local demand.
With both the founders being Indians, it was obvious for us to build a research and development centre in the country. We expect to hire over 200 people in Jaipur in the next three years to accelerate product innovation and maintain our market leadership.
How big is the Indian CIAM market? How has it evolved over the years?
The Indian CIAM market is growing as Internet penetration accelerates and more businesses start offering their services online. We already have 460 million users on the Internet with an average of 12 identities per person. That’s a total of over 5.5 billion in digital identities. We believe this number will grow 10 times in the next five years and someone needs to manage and secure those 50 billion identities.
In the CIAM market, you are pitted against a number of companies including Microsoft, Janrain, Okta, Ubisecure, ForgeRock, Ping Identity Corporation, and Gigya. What’s your take on the competition in the global market given the presence of so many companies?
The identity space is large and is divided into two main segments—enterprise IAM and customer IAM. Enterprise IAM vendors offer identity solutions around internal users, which include employees or contractors, while customer IAM offers identity solutions around external users i.e. the customers. Microsoft, Okta, Ubisecure, and Ping Identity primarily fall under enterprise IAM, while LoginRadius along with Gigya, ForgeRock and Janrain are customer IAM vendors.
The CIAM market is estimated to reach $20 billion in revenues by 2020 and there are only a handful of players. Our biggest differentiation in the market is that we are a cloud-based security-focused CIAM platform for large enterprises.
The advent of biometrics, voice recognition software, IoT and cloud-based technologies has effectively expanded the potential of the market, growing beyond human identification to include devices and digital services. Where do you see the market heading?
Methods of authentication and identification will continue to evolve. These new methods can easily be enforced on employees; hence, they are becoming part of enterprise IAM. But these technologies take much longer to be adopted by consumers as it requires significant businesses to offer them as options to login and sign up on web and mobile apps. So, it is a chicken-and-egg problem.
For the customer identity use case, the device identity is always associated with a human identity unlike industrial IoT, where device identity is associated with the business. We have developed our platform to handle large-scale device identities. The market is still relying on legacy technologies which often fail to offer a unified customer experience, fail to secure a customer’s accounts and data, and also do not comply with privacy regulations. The market is trying to fix these problems before they start offering new methods of authentications.