📊 Cybersecurity Funding Review - July 2022

Each month I do a quick recap of cybersecurity funding and acquisition stats by the numbers with visuals.

All of this is built off of the data I collect each week from the Security, Funded newsletter.

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At a Glance by the Numbers

A lookback at what moved the cybersecurity market in July 2022 by the numbers

• Approximately $1.2B was invested in 34 cybersecurity companies across 25 unique product categories in July 2022, a healthy rebound from the $919.6M in June 2022, but with 37% fewer companies down from 54.
• ~50% of funding from July came from just 3 transactions to the tune of $600.0M
• Over 60% of funding went to United States-based companies, a 10% drop from June 2022, with over 20% of funding going to Switzerland-based companies.
• 21 companies across 11 unique product categories accounted for $126.3M merger or acquisition events, a significant drop from publicly available data of $700.0M in June 2022
• Professional Services companies were the most acquired category of company, followed by Managed Security Services Providers (MSSPs).

My Anecdotes

• This bit of "rebounding" in July shows the continued resiliency in the cybersecurity market.
• The VC and PEGs who major in cybersecurity will continue to reap the rewards of their efforts as those who only dabble in cyber will take a conservative step back.
• The companies who can still raise at favorable valuations will the day and those who cannot will be targets for M&A.
• M&A is still on a tear this year (and will continue to be) in the cybersecurity market as larger players look to add depth to their existing portfolio of capabilities.
• This level of consolidation will ultimately drive better innovation is the sub-markets within cybersecurity come closer together. It's either that or be stifled out, and that's simply not something cybersecurity founders and their VC backers do.
• The Web3 and cybersecurity collision is coming (and is long overdue). July saw more security-related funding in the Web3 – crypto, NFTs, blockchains, distributed ledger technology (DLT) – than any other month yet. This is just the tip of the iceberg in this space.

Top Funded Product Categories

• $281.5M for Data Protection
• $250.0M for Cyber Insurance
• $209.0M for Distributed Ledger Technology (DLT) Security
• $134.1M for Breach & Attack Simulation (BAS)
• $74.0M for Operational Technology (OT) Security

Top Funded Industries

• $553.0M for No Specific Industry
• $250.0M for Insurance
• $114.2M for Industrial Control Systems (ICS)
• $100.0M for Blockchain
• $97.5M for Web3

Top Lead Investor Teams

• $250.0M from BlackRock
• $250.0M from Allianz X, Kinetic Partners, Valor Equity Partners
• $100.0M from LDA Capital
• $90.0M from Summit Partners
• $75.0M from Carrick Capital Partners

Top Countries Funded

• $721.4M for United States
• $250.0M for Switzerland
• $108.0M for Singapore
• $81.5M for China
• $11.5M for Portugal

Data Collection Methodology

A few tenants I follow for collecting and creating this data:

• I only use public data sources
• I evaluate each company that makes this list to make sure they are solving a cybersecurity problem
• I personally assign the product category for each company (regardless of what their marketing says)
• All funding and acquisition values are in U.S. dollars
• All funding amounts are from the time of collection

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Cheers,

Mike P