Over the past few weeks we reported on a fresh new few hundred million dollars that are designated for cybersecurity startups and emerging growth companies. Those funds are managed and invested by three VC firms: Allegis Capital, Trident Capital Cybersecurity and Evolution Equity Partners.
Many young cyber startups seeking capital put together short lists of potential angel investors and VC firms, but they don’t include corporate investors. That’s a big mistake. Why? Because corporate investors are some of the biggest investors in cyber. According to CB Insights, Intel and Google are top-10 investors in cybersecurity, right alongside the VC firms that invest heavily in the space.
So who are the top corporate investors in cybersecurity? CB Insights lists the top 10 from 2010 through Q2 of 2015 as follows:
- Intel Capital
- Google Ventures
- Qualcomm Ventures
- Juniper Networks
- Salesforce Ventures
- Samsung Ventures
- NTT DOCOMO Ventures
- Citi Ventures
Some of the corporate investors focus on early-stage cyber startups. Others focus on specific market sectors or industry verticals within cyber – for instance, Citi Ventures, which focuses on cybersecurity technologies aimed at protecting financial services companies. Banking and financial services is the fastest-growing non-government cybersecurity market, according to Cybersecurity Ventures’ Q3 2015 Cybersecurity Market Report.
Citi Ventures says security is critically important for the financial services industry, and protecting their customers’ data is paramount. They invest in security startups with defensive and offensive technology strategies, including technologies that assess future behaviors.
The vertical focus is a smart play by Citi Ventures, although no surprise considering they are part of Citi, the leading global bank, which has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions.
So, how would a cybersecurity startup grab Citi Ventures’ attention? Maybe by targeting Citi as a customer first. The Wall Street Journal recently reported that Citi’s annual cybersecurity budget has risen to more than $300 million. If you are a cyber firm focused on the banking sector, then landing Citi as a customer – even a small prototype customer – could add a lot of credibility when knocking on Citi Ventures’ door.
The point is if you’re a cybersecurity company looking for a cash infusion, you should expand your horizons and include some of the corporate investors on your short list. Do a little homework and research where each of the corporate investors focuses and think about how to position your company to them.
Steve Morgan is founder and CEO at Cybersecurity Ventures and editor-in-chief of the Cybersecurity Market Report and the Cybersecurity 500 list of the world’s hottest and most innovative cybersecurity companies. Follow Steve on Twitter or connect with him on LinkedIn.