AI-native data security platform Matters.AI (erstwhile known as OptiQ.AI) has raised INR 42 Cr ($4.7 Mn) in seed funding co-led by Kalaari Capital and Endiya Partners with participation from existing backers Better Capital and Carya Venture Partners.

The startup is planning to deploy the fresh capital to scale its presence, invest in research and development (R&D), improve its reasoning capabilities, and increase integration capabilities across multiple frameworks.

A part of its funding amount will also be utilised in go-to-market (GTM) efforts towards North America. The startup’s cofounder Keshava Murthy told Inc42 that the North America expansion would help the startup grow its annual return rate (ARR) by 5x, maintain 58% quarter on quarter (QoQ) growth, and build a strong team.

“We plan for a large Series A after achieving our metrics, expanding the product vertically with more intelligence so it acts as a true companion for chief information security officer (CISOs),” he added.

Founded in 2023 by Murthy and Harsh Sahu, Matters.AI positions itself as Bharat’s first AI security engineer, offering businesses a platform that helps organisations find, monitor, and secure sensitive data across cloud systems, applications, devices, and internal setups.

Their product automatically tracks the movement of data, detects unusual activity, and stops potential risks like leaks by analysing how information is used and by whom. For this, it uses multiple multimodal large language models to identify what data an enterprise is holding, and based on that trace data movement across the ecosystem with a unique technology called extended berkeley packet filter (eBPF).

“Once that is done, if any misuse happens, there is a copilot which takes care of investigation and remediation. This means you have one smart engineer companion in your company rather than ten engineers working on repetitive tasks,” Murthy noted.

The startup claims that its clientele of over 50 features the likes of Groww, Credit Saison India, Indian International Insurance, Nokia among others.

Matters AI last raised INR 13 Cr (about $1.5 Mn) in its pre-seed round in 2023 co-led by Better Capital and Carya Venture Partners. Including the recent funding, the startup so far raised INR 55 Cr in total funding.

The startup operates in Indian and the United States markets and in the latter competes with Cyera.

The development comes at a time when the Indian government released draft rules for the Digital Personal Data Protection Act earlier this year, with an aim to set clear responsibilities for data fiduciaries and ensuring individuals have control and informed consent over their personal data.

These rules are expected to make data privacy and security mandatory for businesses operating in India. Murthy emphasised India’s strong potential as a market, stating that once the DPDP Act is implemented fully, data privacy will become a regulatory cornerstone.

However, the rollout of the DPDP Act also comes with concerns. The Internet and Mobile Association of India (IAMAI)recently flagged ambiguities in the Act related to the processing of publicly available personal data, cautioning that these could pose compliance challenges for startups and small businesses trying to innovate within India’s digital economy.

Important to note that the final rules of the DPDP act are yet to be released by the government.

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