Cybersecurity venture funding cooled in 2023. Even though Statistica reported that the market slowed from a peak of $6.5 billion in Q1 of 2022 to $1.6 billion in Q2 2023, Crunchbase listed six cybersecurity deals well above $100 million.
It’s also worth noting that there were four cybersecurity deals of exactly $100 million. Companies with good ideas around cloud security, secure access service edge (SASE), network monitoring, and identity threat protection still attracted funding.
As Snehal Antani, co-founder and CEO of Horizon3.ai, wrote in an SC Media Perspectives column Dec. 26: “Attacker tactics, techniques, and procedures always evolve, which means companies will need new cybersecurity tools with improved capabilities. While the incumbents will fulfill some of those features, we should expect a vibrant ecosystem of cybersecurity startups challenging the status quo this year.”
Here's a thumbnail of the top six cybersecurity deals of 2023. We may not see as many nine-figure deals this year, but security pros with good ideas can rest assured that with the right idea, they still have a shot with the VCs.
Netskope
Size of deal: $401 million
Date: Jan. 5
Primary funders: Morgan Stanley Tactical Value, with participation from Goldman Sachs Asset Management, Ontario Teachers’ Pension Plan and CPP Investments
Type: Convertible notes
Product focus: SASE
CEO: Sanjay Beri
Quote from Sanjay Beri: “Our vision from day one was that traditional network and security perimeters would transform, with users, data, and devices moving outside the confines of corporate network perimeters and requiring a new approach to security. With a cloud-first, data-first, and customer-centric philosophy, we built a market-leading SASE platform and one of the world’s fastest and most-connected security cloud networks. We have enabled enterprises everywhere to allow their users to be mobile, efficient, and flexible while securing them and the data and applications they access, whether they are in the cloud, on the web, or are private applications on-prem and beyond.”
Wiz
Size of deal: $300 million
Type: Private, late-stage
Primary funders: Lightspeed Venture Partners and existing investors Greenoaks Capital Partners, Index Ventures
Product focus: Cloud security
CEO: Assaf Rappaport
Quote from Assaf Rappaport: “While there are many cybersecurity offerings in the market, Wiz's explosive growth proves that organizations choose our platform because it allows security and development teams to efficiently identify vulnerabilities and prevent breaches. Wiz also consolidates many fragmented tools into one platform, from vulnerability assessment to data security and permission analysis. This round of funding will accelerate the growth of our global operations, enable diversification of our customers across a range of industries, and support our commitment to continued innovation.”
Blackpoint Cyber
Size of deal: $190 million
Date: June 8
Primary funders: Bain Capital Tech, Accel
Type: Growth investment
Product focus: Managed detection and response for MSPs
CEO: Jon Murchison
Quote from Jon Murchison: “The MSP market is growing fast, and we are matching that growth by scaling and innovating new cybersecurity solutions."
Deepwatch
Size of deal: $180 million
Date: Feb. 15
Primary funders: Springcoast Capital Partners, Splunk Ventures, Vista Credit Partners
Type: Equity investment and strategic financing
Product focus: Managed detection and response
CEO: Charlie Thomas
Quote from Charlie Thomas: “Business transformation to cloud and digital, coupled with increasing levels of cyber risk drives strong demand for advanced protection from Deepwatch. We are excited to partner with Springcoast Capital Partners, Splunk and Vista Credit Partners to advance our mission to protect the digital economy and defend against the increasing volume and complexity of cyber threats.”
BlueVoyant
Size of deal: $140 million
Date: Nov. 29
Primary funders: Liberty Strategic Capital, ISTARI
Type: Series E for acquisition of Conquest Cyber
Product focus: BlueVoyant, cloud-native network monitoring; Conquest Cyber, risk management
CEO: James Rosenthal
Quote from James Rosenthal: “Despite the extensive range of cybersecurity vendors, a significant gap persists in the market concerning comprehensive solutions that empower clients to assess, operationalize, validate, and mitigate risks. The integration of BlueVoyant's and Conquest Cyber's capabilities addresses this shortfall, bolstering our ability to protect clients' internal and external digital ecosystems in a more comprehensive manner.”
SpyCloud
Size of deal: $110 million
Date: Aug. 23
Primary funders: Riverwood Capital
Type: Growth round
Product focus: Identity threat protection
CEO: Ted Ross
Quote from Ted Ross: “For the last seven years, we have proven that reacting quickly to identity and authentication exposures is the crucial factor in stopping the cycle of cybercrime. As authentication methods improve, businesses need to adjust their defenses to keep up with criminals’ new behavior. SpyCloud allows you to do just that — and we will continue to illuminate and resolve the most critical risks facing security teams today, stopping attacks they haven’t been able to see coming.”
