Cybersecurity Funding Insights

A new wave of cybersecurity IPOs is anticipated over the next 12 to 18 months. SailPoint's re-entry last week served as an initial test, and despite a muted first-day performance, the subsequent upward trajectory of its share price suggests a positive outcome. New research led by Matthew Ball at Canalys (now part of Omdia) analyzed 24 previous cybersecurity IPOs between 2012 and 2024 to spotlight the most active investors that funded those vendors’ growth and their subsequent performance post-listing. The results were mixed: • The 24 vendors (see chart) collectively were valued at $51.8 billion at IPO and raised a total of $6.1 billion in funding. SentinelOne ($1.2 billion), CrowdStrike ($612 million) and Cloudflare ($525 million) were the top three in terms of IPO funding. SailPoint recently surpassed them all by raising $1.3 billion. • In the lead up to their IPOs, the 24 vendors secured $4.4 billion in pre-IPO funding. SentinelOne ($697 million), CrowdStrike ($445 million) and Tenable ($310 million) led the way. The current three most funded pre-IPO vendors are Wiz ($2.0 billion), Netskope ($1.4 billion) and Snyk ($1.2 billion). • More than 150 different investors provided funding in the lead up to the 24 IPOs. Accel, Sequoia Capital, Insight Partners, Kohlberg Kravis Roberts & Co. L.p. had invested in four or more of them. These plus others like Lightspeed, Coatue, ICONIQ Growth, and Andreessen Horowitz, are among the most active in the next wave of potential IPOs, and will be looking for a return on their collective (all investors) $63.5 billion of pre-IPO cybersecurity vendor funding since 2020. • 13 of the 24 vendors have either been acquired or gone private. Splunk and Carbon Black were acquired by Cisco and VMware for a combined value of $30.2 billion. The remaining 11 were acquired in take-private deals totalling $47.4 billion. Like with SailPoint, this allows vendors to invest in longer-term strategies free from the scrutiny of quarterly reporting. • Thoma Bravo took six vendors private (ForgeRock, Ping Identity, Darktrace, Proofpoint, SailPoint and Sophos) for $33.5 billion. Permira (Mimecast) STG – Symphony Technology Group (FireEye, Inc.) Vista Equity Partners (KnowBe4) Francisco Partners (Sumo Logic) and Turn/River Capital (Tufin) were also active. The Thoma Bravo and Permira assets are most likely to follow SailPoint and return to being publicly listed.

Turning Cyber Risk Into Boardroom Metrics That Matter - Forbes Cybersecurity has always come with a translation problem. Technical teams speak in terms of vulnerabilities and threats, while boards want to understand risk in dollars and business impact. As attacks become more costly and regulatory scrutiny grows, however, the gap between technical risk and business accountability is shrinking fast. The Boardroom Is Asking New Questions Boards and executives increasingly want to know: How much risk are we taking on, in real financial terms? Are cybersecurity investments justified? Are we actually reducing exposure—or just reacting to the latest crisis? All fair and valid questions. The pressure to answer these questions isn’t just external. Internally, organizations are moving away from blank-check security budgets. Leaders expect to see risk—and progress—quantified in business language: dollars, business impact, and return on investment. From Jargon to Dollars It is an eternal struggle. For most companies cybersecurity is a cost center, not a revenue-generating function. The better cybersecurity is at achieving its stated objectives, the less necessary it seems—if there are no successful attacks, why spend so much money on defending against them? Cyber risk quantification is quickly gaining ground as a bridge between IT and the C-suite that addresses this challenge. The promise is simple: turn technical scenarios into dollar-based outcomes so everyone is on the same page. CRQ platforms don’t just talk about possible vulnerabilities—they show what a breach could really cost, how an investment reduces exposure, and where risk is shifting across the organization. This approach is becoming the new standard as boards and regulators demand clear evidence of measurable progress. A New Player in the US Market The changing landscape is driving international players to expand their presence. Squalify, a Munich-based cyber risk quantification provider, just announced its U.S. entry, launching with a Bay Area healthcare customer. The company’s platform, backed by Munich Re’s cyber loss data, aims to help organizations move from reactive, compliance-based security toward proactive, ROI-driven strategies. #cybersecurity #CyberRiskQuantification #CRQ #boardofdirectors #riskmanagement #ROI

Now that cybersecurity funding and valuations have come back to earth a bit, which investors are staying — and which are leaving? Some of the most active cybersecurity investors from 2021–2024 dialed back their activity in 2024. Several others ramped up. I’d be careful about reading too much into this without an even more detailed look into the data, but it does make me curious about why all of this happened. Here’s what I mean. Insight Partners has been the most active cybersecurity investor since 2021 with 74 total investments. They were still one of the ten most active in 2024, but their eight investments were down almost half over their five-year average. Ten Eleven, SYN Ventures, Bessemer, and Tiger Global are top ten investors (by volume) since 2021, but not in 2024. Activity from Sequoia, Accel, and Lightspeed was all stable. Meanwhile, Andreessen Horowitz, Index, Evolution Equity Partners, and Vertex all cracked the top ten in 2024. The big question is how many investors (especially the larger firms who are investing in more than cybersecurity) are going to lean in or pull back from our industry based on everything that has changed since 2021–2022. Again, I wouldn’t read too much into this based on positive or negative activity variances in a single year. Firms like Ten Eleven and SYN Ventures are cybersecurity industry specialists — they’re not going anywhere, and they’re still doing a lot of deals. But I’m very interested in what the next five years are going to look like.