The rise was led by the U.S., with investments into the sector rising 22% in 2020 over 2019
Investment into cybersecurity startups hit a record high of $7.8 billion in 2020, according to new data published today by Crunchbase.
The rise was led by the U.S., with investments into the sector rising 22% in 2020 over 2019, higher than the 15% growth seen in overall venture capital investment over the same time period.
In contrast to the overall venture capital market, 39% of funding into cybersecurity startups went into angel, seed and early stage. Globally that figure increased to 45%.
Diversity of geography isn’t exactly high on the list, however, since the U.S. and Israel combined accounted for nearly 90% of all venture funding for cybersecurity companies in 2020. The U.S. recorded 76% of all global cybersecurity funding in 2020, at $5.9 billion.
The U.K. captured a little more than 3% ($262 million) of venture capital investment into cybersecurity in 2020, largely due to an $80 million Series C round for data privacy company Privitar Ltd. SiliconANGLE previously reported on Privitar when it raised $16 million in 2017.
The numbers for the cybersecurity startup sector continue to improve, as the Crunchbase report said 2020 saw six new cybersecurity unicorns, or startups with a valuation of more than $1 billion, the highest on record. Five were from the U.S. and the last one, Cato Networks Inc., is based in Israel. In 2021 to date, the number of new cybersecurity unicorns has already hit nine.
The top investor in cybersecurity startups in 2020 was Accel, followed by Insight Partners, Techstars and Y Combinator, the last two particularly investing in early-stage companies. Israel-based OurCrowd and Singapore-based Singtel Innov8 also made the list.
Clearly we have had an unprecedented, rapid and unexpected experiment, quickly turned movement, to a decentralized workforce, Hank Thomas, chief executive officer at venture capital firm Strategic Cyber Ventures LLC, told SiliconANGLE. This has forced cybersecurity strategists and operators to move and create new security controls that protect these now more heavily used communications paths, as well as the places people are increasingly storing data and running analytics.
Although 2020 was mostly tactical movements to keep up with the unexpected and rapid shift to virtual, he added, the remainder of 2021 and 2022 will see more operational and strategic level moves as a new, more permanent security framework is established to support the hybrid workforce environment.
That’s likely to spur even further security platform consolidation, Thomas said. Expect bigger tech companies, pure-play large cybersecurity firms, SPACs and private equity firms to all be major players in the rollup.