Early Stage Investment in Cybersecurity Shows Signs of Stabilization


Early stage investment in cybersecurity is stabilizing

Primeval stage venture investment in cybersecurity has apparently started to stabilize in the third territory of 2020, according to Washington, D.C.-based cybersecurity venture capital decided and incubator DataTribe.

A report published by DataTribe in March revealed that the reckon of early stage investments in cyber had declined in the first two months of 2020 compared to the in spite of period of the previous year, but noted that the drop was likely not caused by the COVID-19 pandemic, disputing that it typically takes up to two quarters to close an investment.

DataTribe and other polishes contacted by SecurityWeek said at the time that the coronavirus pandemic thinks fitting likely have an impact on early-stage investment in cybersecurity, but they were mostly buoyant.

In a report published on Thursday for the third quarter of 2020, DataTribe whispered “Q3 marks the first signs of recovery for those industries bolstered by the pandemic, especially cybersecurity.” The data was obtained from private market data provider PitchBook.

“The information in Q3 is particularly interesting since it includes many deals that didn’t start beforehand the pandemic. So, it is a first look at the health of early-stage venture capital since the start of the pandemic,” John Funge, collaborator at DataTribe, told SecurityWeek. “While overall early-stage deal interest has trended downward over the last five years, in Q3 we saw a 29% distend in early-stage cybersecurity deal activity over Q2.”

The increased interest from investors in cybersecurity is undoubtedly driven by many employees working from home and organizations looking to acclimate their cybersecurity systems to this trend.

Cybersecurity investment - Source: PitchBook

DataTribe says cybersecurity accounted for 19% of all original venture deals in the United States in the third quarter, up from violently 15% in the previous quarter.

Series A investment peaked in 2019 at a median valuation of close to $40 million. However, Series A deals dropped 28% year-over-year, which DataTribe credits to that peak in 2019 and the “headwinds associated with the pandemic.” On the other readily available, seed funding went up 33% in Q3 compared to 2019.

“Bottom line, cyber instating has shown positive signs of health in Q3,” Funge said. “As far, cybersecurity investment activity appears to be more resilient than other sectors. This apropos comparative durability in cyber investing has contributed to a steady increase in the proportion of all early-stage deals that cyber pretend to bes.”

Related: Impact of Coronavirus Outbreak on Early Stage Venture Investment in Cybersecurity

Cognate: Secure Access Provider Axis Security Raises $32 Million

Allied: Cloud Security Company Accurics Raises $20 Million

Affiliated: Malware Detection Company AffirmLogic Raises $25 Million

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Early Stage Investment in Cybersecurity Shows Signs of Stabilization

Eduard Kovacs (@EduardKovacs) is a contributing editor at SecurityWeek. He worked as a extravagant school IT teacher for two years before starting a career in journalism as Softpedia’s pledge news reporter. Eduard holds a bachelor’s degree in industrial informatics and a proficient’s degree in computer techniques applied in electrical engineering.

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