SA国际传媒

While cybersecurity couldn鈥檛 quite match last quarter’s record-setting fundraising total, it showed almost no signs of slowing down.

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Now, the only real question that remains is: Will total funding for the year hit $20 billion?

Last quarter saw approximately $5.3 billion pour into the different areas of cyber. While the third quarter closed at just under $5 billion, that still ranks as the second-biggest funding quarter the sector has ever seen鈥攁nd well ahead of the $1.5 billion seen in the same quarter last year.

According to SA国际传媒 numbers, just more than $14 billion now has been invested in cybersecurity year to date鈥� far outpacing the then record-breaking $7.8 billion raised by security companies last year.

Although this quarter’s total funding was the second highest on record, it is interesting to note deal flow seemed to greatly slow. The 123 funding deals announced in the quarter is the lowest amount of deals closed in seven years in a quarter. However, what this quarter lacked in quantity it seemed to make up for in quality as valuations continue to be off the chart for cybersecurity companies.

Seven raises this quarter were more than $200 million and 18 rounds totaled more than $100,000. The largest rounds of the quarter included:

• Boston-based application security developer closed a $530 million Series F early last month at a valuation of $8.5 billion. The round was co-led by and
• In July, New York-based blockchain cyber firm , a security-focused platform for digital assets, raised $310 million in a Series D funding. The round was co-led by , , , , and . The financing brought its valuation to above $2 billion; and
• Santa Clara, California-based secure access service edge security company closed a $300 million investment round led by existing investor 鈥攍ifting its valuation to $7.5 billion.

In the headlines

The continuing surge in capital investment in cybersecurity comes as the industry continues to be in the news due to an onslaught of hacks and ransomware attacks. President 鈥攈elping to kickoff October as 鈥淐ybersecurity Awareness Month鈥濃�攖he White House was looking to bring together 30 other countries to fight against the increasing amount of ransomware attacks and other cybercrime.

Cybersecurity was further highlighted in a much more human way last week by a that a ransomware attack may have led to a baby鈥檚 death in 2019, when an Alabama hospital鈥檚 computer systems were affected by an attack and unable to detect an issue during childbirth.

Health care IT security is one of the areas that many venture capitalists have pointed to as a new emerging area of cybersecurity.

Cybersecurity鈥檚 variety

However, that may be one of the most amazing aspects of the run of investment cybersecurity is seeing鈥攊t is not one new, growing subsector of the space or one particular type of solution that is leading the growth, but rather dozens of new emerging areas as companies and consumers look to secure everything from finances to APIs.

Just a quick glance of the top five rounds shows the diversity in investors鈥� interest, ranging from risk management and cloud security solutions to software development and the expanding area of cryptosecurity.

Expanding that view to the top 10 rounds of the quarter adds companies from the increasingly popular cyber insurance sector, such as San Francisco-based and , as well as identity platforms like San Francisco’s .

Perhaps the only thing that can match the diversity of security solutions is the variety of investors. According to SA国际传媒 data, over 340 different investment firms invested in the sector in the third quarter. No firm made more than five investments鈥攚hich was Accel鈥攁nd only three other firms made four deals in the space鈥擳iger Global, 1 and 鈥攊n the third quarter.

Where this is likely to stop is impossible to say, but with this year鈥檚 fourth quarter practically a lock to surpass the $2.8 billion in investment the space saw last year, a $20 billion year in cybersecurity seems like a real possibility as companies, the government and consumers look to stay safe while staying connected.

Methodology

Cybersecurity is defined by the industries of network security, cloud security and cybersecurity, as according to SA国际传媒 data.

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