📊 Cybersecurity Funding Review - January 2023
Cybersecurity Funding Review - A look back at what moved the cybersecurity market in January 2023.
Table of Contents
It's that time again.
Each month I do a recap on the business of cybersecurity funding and M&A news by the numbers, with visuals, and with my own commentary. I tweak these reports and add or remove sections and charts month-to-month based on feedback I get from readers like you. Let me know what I should start, stop, or continue.
This is the first monthly report for 2023.
I build these reports each month from some of the data I collect each week from the Security, Funded newsletter. If you're interested in poking through a different slice of the data, check out the Cybersecurity VC Database I made. It's the only open-source dataset like it!
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By the Numbers
A look at what moved the private cybersecurity market in January 2023 by the numbers.
- Approximately $1.1B was invested in 52 cybersecurity companies across 30 unique product categories in January 2023, up from $890.8M in December 2022.
- 26 companies across 16 unique product categories were acquired or had a merger event in January 2023. Managed Security Services Providers (MSSPs) and Professional Services continue to be the most acquired kinds of companies.
- ~81% of funding went to United States-based companies with ~6.5% going Israel-based companies and 5.4% going to United Kingdom-based companies.
2023 Compared to 2022
Here's the link to the newsletter where I originally shared this image in case you missed it.
I also offered a few takes as to why I think the chart looks the way it does on LinkedIn. Check it out and let me know what you think (and let's connect if we're not already)! 👇
My Thoughts and Predictions
- Buyers remain cash and resource-strapped through January and will last until at least Q2 2023.
- As predicted, January 2023 was much more muted in terms of funding activity for high-dollar transactions. Expect a bit of easing up on that in February in terms of companies coming out of stealth mode.
- February 2023 will be very telling for the cybersecurity industry. Most of the major public cybersecurity companies will be announcing their Q4 2022 earnings reports along with Q1 2023 forward-looking guidance and we will get a sense of just how resilient the large
Funding Events by Round Type
- 17 Seed round events equal to $59.9M
- 7 Venture Round round events equal to $107.0M
- 6 Series B round events equal to $122.9M
- 5 Pre-Seed round events equal to $2.2M
- 5 Non-Equity Assistance round events equal to an undisclosed amount
Top 5 Funding Events
- Netskope, a United States-based cloud security and secure access company, raised a $401.0M Convertible Note from Morgan Stanley. (more)
- Saviynt, a United States-based intelligent identity and access governance solution for cloud applications, raised a $205.0M Debt Financing from AB Private Credit Investors.
- Cloudian, a United States-based file and object data protection platform, raised a $60.0M Venture Round from Digital Alpha. (more)
- Hack The Box, a United Kingdom-based cybersecurity education and training platform, raised a $55.0M Series B from The Carlyle Group. (more)
- Cygnvs, a United States-based incident response management platform, raised a $55.0M Series A from Andreessen Horowitz. (more)
Top Funded Product Categories
- $411.5M for Secure Access Service Edge (SASE)
- $231.0M for Identity and Access Management (IAM)
- $60.0M for Data Protection
- $55.0M for Digital Forensics and Incident Response (DFIR)
- $55.0M for Cybersecurity Education & Training
Top Lead Investor Teams
- $401.0M for Morgan Stanley
- $205.0M for AB Private Credit Investors
- $60.0M for Digital Alpha
- $55.0M for The Carlyle Group
- $55.0M for Andreessen Horowitz
Top Funded Countries
- $880.6M for United States
- $71.0M for Israel
- $59.9M for United Kingdom
- $32.6M for France
- $15.0M for Singapore
Top Acquired Product Categories
Data Collection Methodology
A few tenants I follow for collecting and creating this data:
- I only use public data sources
- I evaluate each company that makes this list to make sure they are actually solving a cybersecurity problem
- I personally assign the product category and write the description for each company (regardless of what the marketing says)
- All monetary values are in U.S. dollars and currencies are converted, if needed, at the time of collection
- All monetary values are from the time of collection
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See you again next month!