Cyber security startups pull in record-breaking investment in 2021
Data suggests high-profile data breaches led to a greater number of transactions valued at $100 million or more
Cyber security startups brought in a "record-shattering" $29.5 billion in venture capital spending globally across 2021, according to new data.
The investment total amounts to more than double the number reported in 2020, which was just $12 billion, as reported by financial advisory firm Momentum Cyber.
RELATED RESOURCE
The best defence against ransomware
How ransomware is evolving and how to defend against it
The firm said the increase was largely driven by a rise in cyber threats, with notable data breaches and ransomware attacks spread throughout the year. Investors poured a record amount of capital into 1,042 transactions as a result, with 82 of these being greater than $100 million.
A record number of security startups also reached unicorn status, with more than 30 minted by the end of 2021, including Wiz and LaceWork. That's compared to just six startups managing to achieve the same the year before.
IPOs were also up for the year, with companies like Darktrace and SentinelOne helping to raise $2.2 billion on the stock market. Cyber security stocks consistently performed well and even outperformed the NASDAQ, according to Momentum.
"We are entering a new age of cyber security risk that is testing our defences across every commercial and government organisation," said Dave DeWalt, founder and managing director, Momentum Cyber. "It is the responsibility of defenders like us to keep investing in and nurturing innovation to combat this existential threat and ensure a safe and secure future for all."
Separately, the cyber security industry also saw record amounts of money generated via mergers and acquisitions. The 286 transactions in 2021 added up to $77.5 billion, over three times higher than in 2020. The number was inflated by billion-dollar acquisitions, such as the $14.1 billion deal for McAfee.
The cyber risk of blockchain and cryptocurrencies
2021 will more likely be remembered as a year littered with data breaches and ransomware. There were notable attacks on core infrastructure, such as the Colonial Pipeline and the Irish Health System. This was in addition to large-scale supply chain attacks, such as SolarWinds and Microsoft Exchange.
Looking to 2022, Momentum's report suggests investors will focus on cyber security's "emerging relationship" with cryptocurrency and blockchain.
"While it remains to be seen how these sectors will evolve over the coming year, investors will certainly be paying close attention," the report notes.
-
Curing the cloud hangover: why organizations are rethinking public cloudDiscover why IT leaders are stepping away from a "one-size-fits-all" public cloud approach, embracing cost predictability, and using private cloud to secure enterprise AI data
-
Amazon targets agent safety gains with investment in team behind Lean programming languageNews The tech giant hopes support for the open source programming language could drive AI agent safety improvements
-
Companies are still paying ransoms to cyber criminals despite official adviceNews A Proofpoint survey found evolving ransomware techniques and the use of AI is exacerbating the situation for victims
-
This one cyber crime group accounted for nearly a fifth of all ransomware attacks in JuneNews The Gentlemen, a ransomware a service operator, now accounts for 17% of published attacks
-
Working with the enemy: Ransomware negotiator-turned cyber criminal jailed after working with hackers to extort clientsNews Angelo Martino was supposed to be negotiating on behalf of victims, but was secretly working for ransomware operators
-
Hackers are posing as Interpol to target small businesses – here's what you need to knowNews Small businesses are warned to think twice before clicking on links
-
‘Every hour ransomware goes undetected drastically increases its potential blast radius’: Hackers are breaching networks and laying low for longer – and nearly half of firms don’t realize until data is stolenNews An ExtraHop survey found more intrusions are going undetected, leading to longer dwell times
-
Ransomware cartels are fragmenting into volatile splinter groups, warns Met Police cyber chiefNews Commoditized "cyber crime bazaars" and AI data mining are forcing law enforcement to rewrite its playbook
-
New ransomware threat group, The Gentlemen, has become one of the most active ransomware operators, accounting for 10% of all attacksNews NTT researchers warn that the RaaS group is leveraging SystemBC malware to establish covert tunnelling, evade detection, and support rapid lateral movement across enterprise environments
-
Instructure chose to a pay ransom following the Canvas cyber attack – research shows more than half of security leaders would follow suitAnalysis Opting to pay ransoms creates huge risks for enterprises – you’re relying on the word of criminals
