Smokescreen Technologies, a Mumbai-based cybersecurity company, has been acquired by San Jose, US-based cloud-security company Zscaler. The size of the deal was not revealed, and the deal is expected to be closed by July 2021.

The Zscaler-Smokescreen deal is a major vote of confidence for India’s young cybersecurity startup ecosystem, which has been building up capabilities over the past few years.

Smokescreen Technologies was founded in 2015 by Sahir Hidyatullah and Raviraj Doshi, who wore several hats, containing that of cybercrime investigators before turning to entrepreneurship.

A statement from Zscaler stated that Smokescreen, which works on the principles of active defence and deception to thwart attacks, will be integrated into the Zscaler Zero Trust Exchange. This would support the company augment its capabilities in detecting “targeted attacks, ransomware, and lateral movement attempts. Additionally, Smokescreen will help provide rich threat intelligence and telemetry for the Zscaler team to proactively hunt for emerging adversary tactics and techniques.”

The deal, along with better-than-expected results, meant Zscaler’s shares moved up 7% at close of trade in the US. Zscaler has a market cap of $17 billion.

The company’s products are based on the idea of deception. Their Illusion Black deception platform creates decoys that mimic the real thing and lures attackers along blind alleys, all the while turning the tables and extracting information on the attackers. These are essentially honeytraps to lure and catch black-hat hackers messing about in a company’s servers.

Smokescreen has never raised external funding and is among a crop of Indian cybersecurity startups that have been at the forefront of creating an entrepreneurial ecosystem around cybersecurity in India

The success of cybersecurity startups like Smokescreen is a reminder that India can and must aspire to how countries like Israel have nurtured cybersecurity startups in that country. Exports of cybersecurity products from that country hit a massive $6.85 billion in 2020, up from $3.5 billion just three years ago.

India has the numbers in terms of cybersecurity talent, but that needs further nurturing, regulatory backing, and active support from the authorities to create more successful startups and to emulate the success of ecosystems like Israel.