Privitar, a London-based startup working with the UK's National Health Service to safeguard patient data, has raised an $80 million Series C, reflecting a growing investor interest in cybersecurity driven in part by the coronavirus outbreak.
A sudden, widespread shift to remote work has left many companies vulnerable, and cybercriminals are flooding email inboxes with schemes designed to capitalize on panic surrounding the virus. As of March 26, the number of coronavirus-related phishing attacks had spiked 667% since the prior month, according to IT security company Barracuda Networks.
The victims of such attacks range from Zoom, which has seen its user base soar in recent weeks, to the Czech Republic's University Hospital Brno, home to a key coronavirus testing facility that reportedly endured a computer breach. Already, the pandemic has reshaped the cybersecurity landscape, according to Robert Ackerman, managing director and founder of Bay Area-based AllegisCyber Capital. More coronavirus news: Continuing coverage from PitchBook
“We have a big pickup in cyber threat activity," Ackerman said. "But the environment that we are used to defending has now been virtualized and distributed [with remote working], and the tools that we're used to defending with have been compromised."
Privitar factors in by offering data privacy technology for large enterprises, with a client list that includes Citi and HSBC in addition to the NHS. New investor Warburg Pincus led the company's latest round, with support from Accel, Partech Partners, Salesforce Ventures and others.
As the coronavirus continues creating chaos, Ackerman expects the pace of venture capital investment in cybersecurity to accelerate, particularly for companies that can predict risks. The sector has already seen rapid growth in recent years, with the global amount of VC dollars dedicated to cybersecurity rising from less than $1 billion in 2009 to $7.9 billion last year, according to PitchBook data. So far this year, VCs have invested $1.7 billion in the space across 109 deals.
Alex Ferrara, a partner at Bessemer Venture Partners, believes the cybersecurity industry will be more insulated than others if the economic turmoil that has resulted from COVID-19 leads to a recession. He noted that IT budgets allocated to security are continuously increasing, and as people spend increasingly more time online, the need for cybersecurity will also grow, which could make the sector a relative safe haven for VCs.
But not every startup would come out of such a scenario unscathed. The crowded nature of the sector means there would likely be a winnowing down of cybersecurity companies during a recession, Ferrara said. He expects startups focusing on cloud-based products to weather the storm better than most, as remote working is likely to endure after the coronavirus crisis, as well as those who support Zero Trust, a security concept centered on verifying anything and everything trying to connect to its systems.