Cybersecurity startups are on a roll! For Q1 2018 alone, the industry has raked in a total of $725.8 million from 44 deals. According to FinTech Global, cybersecurity investments in Q1 2018 increased by more than 25% YoY. No doubt that the cybersecurity industry is a hot business area.
Internet of Things (IOT) and Interconnected Systems Create Vulnerabilities
We are living in a highly connected IOT era which makes everyone vulnerable to cyberattacks. Investors are always on the lookout for the next breakthrough that can answer the security needs of a fast changing technology landscape. Therefore, it presents a great opportunity for cybersecurity startups to showcase their products and its benefits. There have been at least 1,242 cybersecurity startups which have found funding since 2012, with total investments reaching $17.2 billion. In 2015, the global cybersecurity market was worth $77 billion from $3.5 billion in 2004. That’s more than 20 times growth in just 11 years. It is predicted that global spending on cybersecurity products and services to combat cybercrime will reach $1 trillion over the next five years. The upward trend is expected to continue and the following cybersecurity startups funding for 2018 will prove just that.
- Digital Reasoning is an AI Solutions and digital software company that analyses text, audio and video to help security and intelligence analyst identify data leakage and erratic behaviors. This startup raised $30 million funding from BNP Paribas.
- Vectra Networks received $36 million funding from Atlantic Bridge. This company sifts through network traffic and logs. The application zooms in on suspicious behavior to uncover attack campaigns.
- Anomali won $40 million additional funding from Lumia Capital. This startup offers real-time forensics to identify compromise in the corporate IT environment.
- Data Visor secured a $40 million funding from Sequoia China. This anti-fraud system is used to fight money laundering, account take overs, fake reviews and more.
- Sift Science takes home a $53 million investment from Stripes Group. Sift Science is a fraud-detection technology that combines user behavior from different sites and apps and assigns them risk scores.
How Big and Bad Have Cyberattacks Become?
While it is true that more companies are taking a preventive stance on cybersecurity, most companies are still oblivious to the real and potential damage hacking and cybercrimes can inflict on an enterprise. In 2016, 758 million cyberattacks occurred or equivalent to 24 attacks per second. We have seen it happen to companies in the past. In 2017, personal information of 143 million consumers were compromised by Equifax. Uber’s system was hacked in 2016, exposing 57 million consumers and 600,000 drivers in the process. Yahoo’s 3 billion user accounts were stolen in 2013. In 2013, the retail chain Target had a major hack in its credit card system. Adobe Systems’ customer ID and passwords were stolen and were sold in the dark web in 2013. EBay’s entire customer base was exposed for 229 days when their system was hacked in 2014.
According to breachlevelindex.com, there were nearly 1,000 reported data-breaches in the first half of 2017 alone. By 2021, cybercrimes will cost the world $1 trillion worth of damages. It is easy to understand why the cyber defenders are jumping in to stop the hackers, right on their tracks. There’s a lot of work to do and the industry needs all the help it can get. As a result, the demand for cybersecurity professionals will increase to 6 million globally in 2019 and unemployment rate will remain at 0% until the year 2021.
Tech Advances are Driving Cybersecurity Companies to Thrive
Technological advances are happening at the speed of light. Because of this, cyber defenders need to rethink and reimagine cybersecurity. First, hacking has progressed from just malwares and viruses. We have seen the proliferation of identity-stealing programs and ransomware. Almost everyone is mobile which makes everyone vulnerable to cyberattacks. Lastly, we have been leaving behind a large digital footprint, which serves as a breeding ground for data miners. Cybersecurity has been keeping up with the changes. For starters, breach detection has improved, most businesses are now using multi-factor authentication and encryption is now the norm. But the most important development is the change in the outlook towards cybersecurity. CEOs and boards across the globe are now placing cybersecurity as top priority.
For all the recent developments that we are seeing in the cybersecurity field, this is just the tip of the iceberg.