The $200 billion Public Sector IT solutions market is ripe for the taking, according to a recent announcement put out by Merlin Ventures, the investment arm of Merlin Cyber. So much so the venture firm is establishing a Public Sector growth program for cybersecurity software-as-a-service (SaaS) startups.
“The U.S. government is the largest market in the world, but it’s incredibly complex to navigate if you’re an emerging company,” explains Merlin Ventures CEO David Phelps. “Our 25-plus years of experience in the Public Sector can now be leveraged by innovative cybersecurity startups to help them expedite FedRAMP certification and propel them into the U.S. Public Sector.”
The turnkey program brings together key elements that can accelerate a cybersecurity startup’s success: capital, an engineering lab, FedRAMP certification, and valuable Public Sector relationships.
Phelps knows too well the hurdles that cybersecurity startups face as he helms both Merlin Cyber and Merlin Ventures. The former offers best-in-class and emerging cybersecurity innovations and the latter has an expanding portfolio of cybersecurity companies that includes Cynet and Cyber Observer. Yet, while there are plenty of challenges for startups, Phelps also sees great opportunities.
One particular challenge is the FedRAMP certification that costs a startup two million dollars and two years to complete. Phelps wants to help startups move pasts this challenge to get to the growing opportunities emerging from government agencies moving to the cloud. They are in need of enhanced security and in turn that is driving demand for cybersecurity SaaS technologies that meet FedRAMP requirements.
The geo-political climate is also part of the need for cybersecurity innovation as cyber-attacks are growing in frequency, sophistication and boldness against the U.S. federal, state, local government and private industry as well. While startups serve as the fertile ground for innovation, the complexity of navigating the U.S. Public Sector hampers government agencies in their efforts to find and access innovative solutions to cyber threat posed to the U.S.
Merlin Ventures wants to narrow the gap between startups and government through its Growth Program. They are putting on the table up to $5M in funding for Series A or B stage companies that are market-ready. They are also establishing a Turnkey FedRAMP certification accelerator to get startups down the road faster and more cost-effectively.
“FedRAMP provides a standardized approach to security for the cloud,” said Seth Spergel, Managing Partner of Merlin Ventures. “With our program, we take companies there in a fraction of the time and at a fraction of the cost. This is not only a game-changer for most companies, especially startup companies, but it’s also a game-changer for U.S. Public Sector agencies. We are making it simpler for government agencies to access the innovative cybersecurity solutions they need to minimize risk.”
Merlin Ventures is also extending to startups their decades of experience in the cyber security industry. Their depth enables them to engage with top cybersecurity engineers who have a role in ensuring solutions align with U.S. Public Sector customer requirements and pain points. The firm will also facilitate ready access to potential U.S. Public Sector customers that is critical, addressing it through the creation of an infrastructure of sales executives and digital marketing resources.
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