Lightspeed India-Backed Scrut Automation Bags $7.5 Mn Funding From MassMutual

Governance, risk and compliance (GRC)-focused SaaS startup Scrut Automation has raised $7.5 Mn in a strategic funding round. The round was led by MassMutual Investors, which is the corporate venture capital arm of Mass Mutual Corporation. 

Endiya Partners and Lightspeed India Ventures are existing backers in the funding round. 

The SaaS startup plans to use the incoming capital for developing new cyber security information security use cases and expand its presence in the US .   

“We have a strong presence in the US and also, have a team based in that country. So, for the next couple of quarters, we will invest in building our go-to-market strategies targeted for the US market,” Aayush Ghosh Choudhury, founder of Scrut Automation, told Inc42.

Including the current fundraising, the startup has raised $11 Mn to date. 

Originally, following a governance, risk and compliance (GRC) framework helps tech companies align information technologies with their business goals while managing risks and complying with government regulations. 

At the moment, most of the GRC-focused enterprise tools cater to the needs of large-sized enterprises and are not directly focusing on small and mid-sized businesses. As a result, mid-sized cloud-based companies are mostly seen managing their compliance manually, from adhering to government regulations to managing audits and artefacts. 

To help small and medium sized companies avoid duplications of efforts and automate their GRC-related tasks, Choudhury, Kush Kaushik and Jayesh Gadewar founded SaaS startup Scrut Automation in 2021. 

Scrut is a subscription-based platform that offers a unified control framework to small and mid-sized companies. It helps companies cut down manual disconnected effort, automates 60-70% of their GRC processes and facilitates them in complying across multiple frameworks at once, Choudhury shared.

How Scrut Helps SMBs?

Explaining the business model, Choudhary said that Scrut acts as a core GRC platform helping small and mid-sized companies manage multiple frameworks, maintaining policy life cycle management and evidence collection. 

Considering the size and complexity of companies, Scrut provides additional offerings including a third-party risk assessment risk module, asset management module and trust vault, which helps companies build trust with enterprise customers.

Talking about its monetising process, the subscription-based platform charges companies between $6K and $35K annually.

“Pricing really depends on the size of the company and the number of frameworks that they want to comply with, and the enormity of the cloud infrastructure that we typically integrate with. But, the pricing typically ranges from anywhere between $5K-$6K going up to $30K-$35K as well,” Choudhary explained.

The startup claims to have grown 45X since its last funding round, where it recorded $35K as annualised revenue ARR. It also aims to grow 4x in terms of revenue by the end of calendar year 2023. 

Scrut is said to have delivered services to more than 250 companies across the globe and manages a base of over 65 employees globally.

Sharing the expansion plans, he added, “We are actually investing a lot of time in building our ecosystem partnerships. There are certain geographies, where we do not have a direct presence. However, we are seeing a lot of interest from resellers and channel partners. So, for the next few quarters, we will engage actively with the channel partners and explore go-to-market (GTM) strategies.” 

In the GRC space, it competes with SaaS startups such as LogicGate, Enterprise Process Center Solutions and MetricStream, among others.

According to a Statista report, India’s SaaS space is pegged at $2.15 Bn in 2023. The industry is set to grow to $3.25 Bn by 2027 and will expand at a CAGR of 10.87% during 2023-27.