The global cybersecurity landscape is evolving rapidly, with threats becoming more sophisticated and widespread. While the U.S., Israel, and Western Europe have long dominated the industry, emerging markets—referred to as Rest of World (RoW) markets—are increasingly gaining attention from investors and cybersecurity firms. These markets, spanning Eastern Europe, Southeast Asia, Latin America, the Middle East, and Africa, present a mix of high-growth opportunities and unique risks.

For investors and startups looking beyond traditional hubs, RoW markets offer an attractive blend of untapped talent, cost efficiencies, government-backed initiatives, and a growing demand for cybersecurity solutions. However, navigating these markets requires understanding the regional threat landscapes, regulatory environments, and operational challenges.

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Key Takeaways:

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Opportunity: Rising cyber threats, digital transformation, and regulatory push for stronger security are fueling demand across industries. Governments in regions like the UAE, Saudi Arabia, and Southeast Asia are investing in cybersecurity, while sectors like finance, healthcare, and critical infrastructure seek advanced solutions.
Risk: Compliance with evolving data protection laws, localization requirements, and geopolitical risks can complicate market entry. Additionally, talent shortages and reliance on foreign security vendors create operational hurdles.
Market Outlook: As cyber threats grow and cloud adoption increases, RoW markets present strong opportunities. However, success depends on navigating regulations, adapting solutions to local needs, and building trust through strategic partnerships.

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Why Look at Non-Core Markets?

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A Growing and Underutilized Talent Pool

Countries like Poland, India, Vietnam, and Brazil have built strong engineering and technical talent pools with cryptography, ethical hacking, and security research expertise. These regions are producing top-tier cybersecurity professionals who often contribute to major open-source security projects and ethical hacking communities.

India, Singapore, and Vietnam have become offshore cybersecurity hubs, with companies outsourcing security operations and software development due to the abundance of skilled professionals. ¹
Eastern Europe (Poland, Estonia, Romania, Ukraine) has a legacy of military-grade cryptography talent and a robust hacker culture, making it a breeding ground for cybersecurity innovation. ²
Brazil and Mexico are emerging as centers for cybersecurity education, with universities offering specialized programs in cyber defense and digital forensics.
Israel’s expertise in cybersecurity is fostering collaborations with UAE and Saudi companies post-Abraham Accords. ³

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Localized Cyber Threats Driving Demand

The cyber threat landscape in RoW markets is distinct from that of Western nations, creating a need for region-specific security solutions.

Fintech and Digital Banking: Countries like India, Brazil, and Nigeria have seen an explosion in digital payments, creating a heightened need for fraud prevention and secure transaction frameworks. ⁴
E-Government and Smart Cities: Governments in the UAE, Saudi Arabia, and Singapore are implementing AI-driven digital services that require robust security infrastructure. ⁵
Cloud and SaaS Adoption: Many businesses in Latin America and Southeast Asia are migrating to the cloud, increasing the demand for cloud security solutions.
Remote Work and BYOD Trends: The post-pandemic shift to hybrid work models has amplified the need for endpoint security and Zero Trust frameworks. ⁶

This variation in threat vectors means cybersecurity solutions tailored for Western markets may not be as effective, opening the door for regionally adapted startups to thrive.

Compliance and Regulatory Evolution

Governments across RoW markets are implementing cybersecurity laws that mirror Europe’s GDPR, creating demand for compliance-driven security solutions.

Brazil’s LGPD (Lei Geral de Proteção de Dados) and Mexico’s evolving data protection laws are pushing businesses to invest in privacy-first cybersecurity frameworks. ^{7 8}
Singapore’s Cybersecurity Act and Indonesia’s data protection regulations are enforcing stricter controls on digital infrastructure. ⁹
The UAE’s National Cybersecurity Strategy is compelling businesses to adopt advanced cybersecurity frameworks to comply with local and international security standards. ¹⁰

Cybersecurity startups offering compliance automation, threat intelligence, and regulatory risk assessment tools will find a growing market in these regions.

Cost Advantages and Scalability

Compared to traditional cybersecurity hubs, RoW markets offer significantly lower operational costs.

Cloud and infrastructure and employee costs are lower in regions where government-backed data centers and cybersecurity innovation hubs subsidize technology adoption.
Startups in these markets can achieve faster profitability due to lower burn rates, making them attractive acquisition targets for larger firms.

Government-Backed Cybersecurity Growth

Many emerging markets recognize cybersecurity as a critical industry and offer incentives for startups.

Singapore has established cybersecurity incubators, funding programs, and strategic partnerships to drive innovation.
Estonia, known for its digital-first economy, provides extensive government support for cybersecurity startups.
The UAE and Saudi Arabia are investing billions into cybersecurity infrastructure to protect national interests and bolster economic resilience. ¹¹
Many governments are collaborating with private cybersecurity firms to enhance national security, presenting opportunities for B2G (business-to-government) partnerships.

Governments are not just supporting startups but also becoming major cybersecurity customers, creating a reliable revenue stream for companies operating in these regions.

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Key Cybersecurity Hotspots in RoW Markets

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Eastern Europe

Strengths: Strong technical expertise, legacy of cryptography and cyber warfare knowledge, NATO collaborations.
Notable Startups:
- CybExer Technologies (Estonia): Specializes in cyber range exercises, training government agencies and enterprises.
- Resecurity (Ukraine/Poland): Focuses on threat intelligence and risk monitoring.
Investor Interest: VCs are funding cybersecurity startups here due to the region’s technical depth and close alignment with Western security standards. ¹²

Southeast Asia

Strengths: Rapid digitization, strong government investment, high mobile penetration.
Notable Startups:
- Horangi (Singapore): Provides cloud security and compliance solutions.
- Silent Eight (Singapore/Poland): AI-driven fraud detection for financial institutions.
Investor Interest: The region’s fintech boom is driving demand for cybersecurity, with investors backing cloud security and fraud detection startups. ¹³

Latin America

Strengths: Rising cyber regulations, rapid fintech expansion, increasing cyberattacks on banks.
Notable Startups:
- Axur (Brazil): Dark web monitoring and fraud prevention.
- MetaCert (Mexico): Phishing and anti-fraud solutions.
Investor Interest: Cybersecurity funding in Latin America is growing, with fintech security being a key investment area. ¹⁴

Middle East & Africa

Strengths: High government spending on cybersecurity, growing cyber threats in finance and national security.
Notable Startups:
- SpiderSilk (UAE): Provides attack surface monitoring for enterprises.
- Lumu (Colombia/South Africa): Real-time threat detection and mitigation.
Investor Interest: Gulf nations are investing heavily in cybersecurity to secure digital transformation initiatives, making the region a lucrative market for security firms. ¹⁵

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Risks in Cybersecurity Investments in RoW Markets

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Complex and Evolving Regulatory Landscapes

Cybersecurity laws in RoW markets are often inconsistent, vague, or subject to sudden changes, making compliance a major challenge. ¹⁶

China’s Cybersecurity Law: Foreign cybersecurity firms face strict operational restrictions.
Data Sovereignty Issues: Countries like India, Brazil, and Russia enforce data localization laws, affecting cross-border security operations.
Unclear Enforcement: Many African and Latin American nations lack robust enforcement mechanisms, creating uncertainty in legal compliance.

Weak Cybersecurity Infrastructure and Low Awareness

Many companies in RoW markets lack basic security controls, such as multi-factor authentication (MFA) and endpoint protection. ¹⁷

Cybersecurity budgets in SMEs and startups remain limited, affecting adoption rates.
Cyber literacy is low among executives and employees, leading to higher risks of phishing and social engineering attacks.

Geopolitical Risks and National Security Concerns

Local Protectionism: Some RoW nations favor domestic cybersecurity companies over foreign vendors, making market entry challenging.
Cybersecurity as a Geopolitical Weapon: Governments may use cybersecurity regulations as a tool to restrict foreign investments or impose trade barriers.
Geopolitical and Regulatory Uncertainty: Government policies can shift unexpectedly, affecting business operations (e.g., China’s tightening cyber laws).

Talent Shortages and Retention Challenges

While some markets are developing cybersecurity talent, others suffer from a severe skills gap.¹⁸

High attrition rates and aggressive poaching among cybersecurity professionals drive up labor costs.
Talent Drain: U.S. and European firms often poach skilled cybersecurity professionals, leading to local shortages.
Investors should consider funding cybersecurity training programs and university partnerships to bridge the talent gap.

Market Fragmentation and Investment Challenges

RoW markets have fragmented cybersecurity ecosystems, leading to challenges in standardizing solutions across multiple jurisdictions. ¹⁹

Limited interoperability between local and global security frameworks hinders adoption of advanced cybersecurity measures.
Market Fragmentation: Each region has distinct regulations and threat landscapes, requiring tailored strategies for expansion.
Lower Valuations: Investors may undervalue RoW startups compared to their Western counterparts, impacting fundraising potential.

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A High-Growth Yet Complex Opportunity

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Cybersecurity startups in RoW markets represent a massive untapped opportunity. These markets are poised for rapid expansion with unique regional threats, growing regulatory frameworks, and government-backed cybersecurity initiatives. However, investors and companies must navigate regulatory complexities, talent challenges, and geopolitical risks to succeed.

Those who can adapt to local market needs, forge government and enterprise partnerships, and leverage the region’s talent pools will gain early-mover advantages in what is becoming a crucial frontier for global cybersecurity innovation.

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References

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Written by:

March 7, 2025

Cybersecurity’s New Frontier: Unlocking RoW Markets’ Potential and Pitfalls