I see that one only needs the host ip address and port number to connect to a memcached instance running on the server.
How do i make sure of any security concerns? This way, if anyone knows my server's ip address, he can fetch out data out of my memcached.
You can use Memcached's SASL authentication to require proper credentials when connecting to the server. On top of that, you can also setup a secure proxy such as stunnel and authenticate the clients using certificates.
Note that both SASL and SSL are supported by http://redislabs.com/memcached-cloud.