Evening Brief – 02.28.23

Information security has never been in higher demand, making for a world of opportunities for cybersecurity startups. Investors recognize the potential too, as funding for cybersecurity ventures has grown rapidly amid the pandemic and an increased focus on IT. While a decline from the previous year, VC funding in the industry totaled $18.5bn in 2022, according to Momentum Cyber, an advisor in the space.

Cybersecurity companies raised capital across more than 1,000 deals last year, but the total investment dropped by 39% compared with 2021, when companies raised a record-breaking $30.4bn. Still, the total raised in 2022 exceeds any other year and represents an increase of nearly 50% compared with 2020.

While numerous startups have reaped the rewards, one seems to stand above the rest: Wiz. The cloud security firm has raised $300mn in Series D funding at a $10bn valuation. Despite the economic downturn, Wiz’s valuation has surged since it raised $250mn at a $6bn valuation in October 2021.

With evolving cyberattack methods due to machine learning, quantum computing and sophisticated hackers, security startups are expected to continue to receive sizable funding in the years ahead.