Garrett Black November 20, 2014
In an age of mass information flow, the privacy of users and businesses has never been more threatened. Target and Snapchat, to take two examples, have suffered sophisticated attacks that exposed the personal information of millions. Yet in order to fully participate in the modern information age, users must relinquish control of their info, trusting in Facebook, Google and others to safeguard their data. As cyber threats swiftly evolve, cybersecurity innovation must outpace them. And as for the most promising sources of cybersecurity innovation, it’s hard to find a better place to look than where venture capitalists are putting their money.
VC invested in cybersecurity startups worldwide has hit $1.1 billion across 105 financings in 2014 to date, just eclipsing the $1.09 billion logged all of last year. But cybersecurity is a vast space, so which specific sub-sectors are driving the industry’s growth? Diving into the PitchBook Platform to find the startups that have amassed the most VC invested and reaped the richest valuations can shed some light on which fields are best poised for success.
Additional VC-backed Players
Startups are continually finding new approaches to combat cyber threats. CyActive, for example, focuses on predictive analytics in order to erase threats before they even occur. Ki, a member of Startup Sauna’s Fall ’14 batch, has developed a USB device that changes and tests passwords on a scheduled basis, interacting with other devices like computers or tablets within physical range.
As for platforms that focus on a specific industry, the PitchBook database turns up Argus Cyber Security, which supplies an automotive security solution that, among other features, scans networks that a car is connected to in search of any abnormal communication. If there are any uncharacteristic incidents that could signal a potential attack on the vehicle via its connections, the system enables real-time response. It also helps security managers such as OEMs identify unauthorized attempts at access.
Looking further ahead, on the very forefront of cybersecurity, there are startups like D-Wave Systems, which is building quantum processors and developing accompanying software architecture. The field of quantum computing has a host of applications, but for the purposes of this article, its ability to compute incredibly complex calculations very rapidly could theoretically render all currently used encryptions vulnerable. The key word there is “theoretically” (thankfully), however more and more startups are likely to follow D-Wave’s lead. In the meantime, there is plenty to contend with in the current cybersecurity space. To further explore VC investment in cybersecurity (company funding/valuation history, most active investors, regional stats, etc.), contact us here.