The Atlas VPN team recently presented data that found the emergence of “78 new cybersecurity companies founded in 2020 that cumulatively have raised over $31.6 million in funding year-to-date.” This whopping total is no surprise, given the recent shift to remote working and subsequent increase in phishing attacks (link to previous article here) during the current pandemic.
To dive into the numbers a little deeper, it appears that only around 15% of startups in the cybersecurity sector were actually able to secure funding. However, of those companies that did, three organizations alone “collected nearly 96% ($30.3 million) of the total amount of investments.”
Beyond was the company that was able to acquire the most significant investment, with a total of $21 million this past February, an investment that single-handedly equals more than “66% of total investments into newly launched cybersecurity startups this year.” The company is an Israeli startup founded by CEO Assaf Rappaport, who is a former head of R&D at Microsoft Israel. Investors in Beyond include Sequoia Capital Israel and Cyber stars Venture Funds Ltd.
On to the cybersecurity startup with the second biggest investment, would be Sevco Security. This organization was able to raise “over $6.7 million in May of 2020. Funds collected by Sevco Security constitute more than 21% of total investments into newly launched cybersecurity startups in 2020.” The Texas-based company specializes in providing security services and products for cybersecurity experts within the field. Sevco Security boasts many notable investors including the early-stage venture capital firm 406 Ventures.
Furthermore, as it pertains to the list of the top three cybersecurity startups in regards to terms of funding, Soc.OS is just as noteworthy. The company “received more than $2.5 million in investments in July this year. Funding received by Soc.OS makes up 8% of total investments in this year's cybersecurity startups.” Soc.OS is a startup, originally from London, whose value lies in “offer[ing] an alert correlation and triage automation tool designed to help internal security teams manage a growing number of alerts produced by threat protection and detection tools. Soc.OS investors include such early-stage venture capital firms as Speedinvest and Hoxton Ventures.”
Overall, the vast majority of 2020’s cybersecurity companies hail from North America, especially the United States in general. The country currently makes up “almost 35% (27) of all the cybersecurity startups launched in 2020…[followed by] Europe, with nearly a quarter (19) cybersecurity startups coming from the region. Regardless of Brexit, nearly 37% (7) of cybersecurity startups founded in Europe this year are based in the UK.” Other countries with key cybersecurity companies include Israel with five companies Singapore with three companies, India with two companies, Brazil with one company, Turkey with one company, and Australia with one company.
A large number of new cybersecurity companies, startups in particular, are shrinking year after year. With the amount of phishing attacks and cybersecurity scams increasing, data has found that there is a clear decline in cybersecurity startups. Historical data has shown that 2015 saw the launch of almost 500 cybersecurity companies that when totaled together, raised “over $3.1 billion in investments. The year of 2016 saw a slightly smaller number of new cybersecurity companies. The launch of new startups in the cybersecurity field decreased by 0.8%, with 486 startups launched that year. The total amount of funding allocated to those startups, however, dropped in half, from $3.1 billion to $1.6 billion.”
More recently, 2017 experienced a 0.8% decrease in the number of cybersecurity startups, with “482 cybersecurity companies founded that year, which raised more than $1.3 billion in total — 17% less than in 2016.” The following year, startups fell by more than a fifth, as 2018 witnessed a mere total of 382 cybersecurity companies being launched. Of these 382 companies, over $847 million were collected in terms of investments, signaling a 35% drop in investment funds since the year 2017. Last year, alone, saw a “46% decrease in the launch of new cybersecurity startups. There were 207 these types of companies founded. Together they raised close to $229.5 million in investments — 73% less than the year before. This year's cybersecurity market has welcomed 78 newcomers — the number has shrunk by 62% compared to last year.”
This data year after year corroborates the growing trend of a clear decline in the launching of cybersecurity startups. However, with the constantly increasing rate of phishing attacks and cybersecurity scams, these companies are perhaps more needed than ever before going forward.
Comments