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5 Reasons to Never Underestimate Cybersecurity Hardware Startups

Businesses now rely so heavily on cloud storage that it’s easy to overlook the importance of hardware cybersecurity. Protecting online data is at the forefront of any company’s cybersecurity strategy, but that could leave any hardware they use vulnerable. 

The same goes for investors looking to find the next big cybersecurity firm. They’re more likely to consider firms focusing on cloud-based solutions because they believe that’s where the money will be moving forward. 

Many firms still use hardware storage, though, and we could see an increasing number of companies go that route as more hackers target the cloud. The main issue is that cloud storage entrusts a third party to protect your data, which isn’t cutting it for some businesses and government entities.

Hardware storage could be making a comeback for this reason, creating new opportunities for developers in the field and investors looking for an edge. This guide offers five reasons to pay attention to cybersecurity hardware startups and takes a look at some companies that are already taking off.

Some Growing Hardware Startups

Seeking out solid examples of thriving cybersecurity hardware startups is a good starting point for investors. Locating similar startups in earlier phases of their development could put you in line for success with your next investment. Hardware startups currently showing signs of life include the following:


New York-based Virtalica is a hybrid solution business owners can deploy on their existing hardware or dedicated devices. This is one cybersecurity hardware startup NYC is buzzing about. Virtalica offers a product that allows users to secure enterprise-scale data both on-site and in-cloud, ensuring vital information is safe at all times. The product was initially designed for military applications and was funded by the U.S. government, so you know it’s a highly secure addition to the market.


ChipSpirit is a startup based out of Bangalore, India, and one of its most successful products is ABHED-1, a secure hardware-based encryption device that protects offline data when sending it over public or open networks. The device encrypts this data before you send it and then decrypts it on the other side, and it is a solid product for any entity that wants its own offline security system in place. 


Singapore-based startup Cypherock has a product called X1 that is the world’s first hardware wallet that never stores its private keys in a single location. The result is 10 times more protection than other hardware wallets offer, guarding the user’s cryptocurrency offline. This startup recently raised about $1 million in a seed round from some big-name investors, so it’s well on its way to success.


Virginia-based startup Fend focuses on cybersecurity hardware solutions to protect critical infrastructure. The company has a mix of hardware and cloud-based offerings for its customers, providing security for IoT devices, embedded systems, and industrial applications. Fend could be a name to watch in the future as companies look to protect their on-site files.

These startups show that success is possible for cybersecurity firms looking to protect company hardware. Investors shouldn’t overlook the importance of these startups in the future because the need isn’t going anywhere.

Five Facts That Could Aid Cybersecurity Hardware Startups

We’re living in an online world, with most firms choosing cloud storage because of its scalability and ease of access. There are some issues with cloud storage, though, that are leading to a slight movement back to offline storage. Some facts that could aid cybersecurity hardware startup growth include the following:

1. Offline Storage Is Safer

Victims reported over 236 million ransomware attacks in the first six months of 2022, a staggering figure showing that no one is safe. About 69% of small or medium-sized business owners also believe a cyberattack could permanently force them to close their doors. Storing data offline can alleviate some of these concerns, but protecting these offline devices when transmitting data remains essential, which is where hardware startups come into play. 

2. It’s Easier to Monitor Offline Data

Monitoring offline data is far easier than when it’s online. Business owners always know when someone accesses offline data because the computer systems can keep a clear record of it, and there’s a limited number of locations where it can go. Reducing the number of variables makes it less likely a company will experience a breach in the future.

3. Rebuilding a Business Is More Straightforward

Scenarios where a business experiences a cyberattack and must rebuild much of its computer systems from scratch can be catastrophic. A cloud storage system could also incur damage through this attack, making the data unrecoverable or unusable. Storing company data offline keeps it safer, leading to an easier recovery.

4. Only the Company Can Access the Data

A significant concern with cloud storage is that a third-party provider has access to it. That typically isn’t a problem if you vet the host, but you never know what could happen in the future. Storing data offline ensures only the company can access it, potentially reducing instances of it falling into the wrong hands.

5. Offline Data Is Easier to Destroy

There could come a time when you’ll need to destroy some previously stored data, especially if you keep customer information. You can remove this data from your cloud storage system, but it could be floating around on multiple networks and servers, making the process more challenging. Businesses can easily remove data from an offline device, deleting it permanently. 

The benefits offline storage offers could make cybersecurity hardware startups more viable moving forward. The world is becoming more connected, but companies are looking to disconnect when it comes to sensitive data that could fall into the wrong hands.

Investing in Hardware and Other Startups

Investors will want to pay attention to the growth cybersecurity hardware startups could experience in the coming years as online attacks become more prevalent. Offline devices offer an additional layer of security, but they’ll still need protection as they transfer data from one location to another.

Option3 brings cybersecurity startups together with investors with industry knowledge. We’re continually examining the latest trends, ensuring investors can take advantage of ideas with growth potential. Contact Option3 for more information on investing in the cybersecurity industry.


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