I recently reported on a new $100 million fund aimed at helping launch cybersecurity startups. The cyber investing frenzy seems to have no end in sight. With the cybersecurity global market growing from $77 billion in 2015 to upwards of $170 billion in 2020, according to Cybersecurity Ventures’ Q3 2015 Cybersecurity Market Report, VCs are sharpening their focus on this white hot space.
The investing atmosphere feels like a poker game … we’ll see your $100 million and raise it another $100 million. Seriously …
Dow Jones VentureWire reports that Trident Capital spun off Trident Capital Cybersecurity, which, according to a regulatory filing in July, is raising a $200 million fund to invest into promising cyberpreneurs.
Sean Cunningham was recently recruited to Trident Capital Cybersecurity as managing director. If the name doesn’t sound familiar, he was previously director of venture investments at Intel Capital. And for those of you who don’t follow the cyber space closely, Intel Capital is a top-10 cybersecurity investor.
Trident Cybersecurity Capital, based in Palo Alto, Calif., has made 18 cybersecurity investments, which led to13 successful exits. Their exits include Solera’s acquisition by Blue Coat in 2013, Qualys’ IPO in 2012, Sygate’s acquisition by Symantec in 2006 and Signio’s acquisition by VeriSign in 2000.
The list of companies Trident invested into reads like a who’s-who of the hottest cybersecurity names: AirTight Networks, AlienVault, Blue Cat, HyTrust, Mocana, Qualys, Solera and others.
According to CB Insights, investors have plunked down over $4.5 billion in cybersecurity startups over the past two years. They say that in Q2 2015 alone $704 million was invested across 47 deals involving cybersecurity firms.
If you are thinking bubble, think again. Cybercrime drives security spending. The British insurance company Lloyd’s estimates that cyber attacks cost businesses as much as $400 billion a year, which includes direct damage plus post-attack disruption to the normal course of business. Some vendor and media forecasts put the cybercrime figure as high as $500 billion and more. There is a huge demand for innovative cybersecurity products and services, and the VCs are smart investors who know it.
It will be interesting to see which VC sits down at the poker table next … and how much cash they bring to the game.
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.