Cybersecurity Market Update: February 2024 Insights & Trends

Dive into February 2024's cybersecurity market trends, cybersecurity investments, major acquisitions, and global insights.

Welcome to the monthly wrap-up issue of Return on Security, where I’ll cover this month’s most relevant cybersecurity market and funding updates. I spend hours collecting, curating, and analyzing this information every week, so you don’t need to - here we go👇

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⚠️ Important: All of the charts are interactive, so you can click around, filter, hover over, and even download the data to get the most out of it.

Table of Contents

February 2024 Highlights

From startups to giants, the cybersecurity landscape is shifting under the weight of innovation and market demands.

  • February 2024 continues to showcase high activity in stocks, funding, and M&A despite Cisco and Tenable's workforce cuts.

  • While February 2024 didn’t quite have the high-profile acquisitions that January saw, M&A activity was still on par with this same time last year.

  • February was also the month that many of the larger public cybersecurity companies gave their earnings reports from Q4 2023. Okta, Zscaler, Palo Alto Networks, Check Point Software, Fortinet, Qualys, Rapid7, and Tenable all navigated a complex cybersecurity market with varying degrees of success.

By the Numbers

A look at what moved the cybersecurity market in February 2024:

Funding Insights

In February 2024, approximately $940.0M was invested in 52 cybersecurity companies across 34 unique product categories, with Managed Security Services Provider (MSSP) and Bug Bounty leading the way.

By product category and funding amount.

Global Funding Distribution

Cyber was well-represented in February 2024 across the globe, with companies from 14 different countries taking in funding.

In February 2024, the United States led the way with cybersecurity funding, with ~88%, with Malta and Israel trailing behind at ~4% and ~3%, respectively.

Mergers & Acquisitions

21 companies across 14 unique product categories were acquired or had a merger event for more than $750M in February 2024. Managed Security Services Providers (MSSPs) and Professional Services companies were the most acquired kinds of companies last month.

Most surprisingly, on the acquisition front, ZeroFox was taken private for $350M. ZeroFox went public via SPAC in late 2022 (arguably the worst time to go public in recent memory) after raising more than half of that through fundraising.

My Work

My work from this past month.

This Month’s Top Great Reads

Some of my favorite Great Reads from this past month’s newsletters.

  • Ransomware Payments Exceed $1 Billion in 2023 - I love a report with lots of charts and data (duh), and this one doesn’t disappoint from Chainalysis. This report breaks down the economics and the players involved in the ransomware gang from 2022 and 2023.

  • Fabric - AI Human Augmentation Framework - My buddy Daniel Miessler posted his incredible open-source GitHub framework called Fabric for augmenting humans using AI. I've been playing around with this a ton for all kinds of life stuff, and it's amazing.

  • CyberSeed Founders Meetup w/Hamza Fodderwala - Sid Trivedi and Hamza Fodderwala talk about what happened in the public markets in 2023, what security demand will look like in 2024, and what it will take to go IPO in the future.

  • Palo Alto Networks - A Play For The Future - Tyler Shields argues that despite short-term market reactions and lower guidance for 2024, Palo Alto's acquisitions and focus on a unified platform leveraging AI will secure its long-term dominance in the cybersecurity market.

  • Walter's War Podcast - This is the first part of a four-part series about one of the co-founders of defense tech, Rebellion Defense, and how his life was a "tissue of lies." It's an incredible series that has aspects of AI, lying, defense tech, the metaverse, and more. h/t to Dave Palmer for turning me on to this series!

Return on Security Newsletter Issues

Here are the weekly newsletters from this month.

Data Methodology and Sources

  • All of the data is captured point-in-time from publicly available sources.

  • All financial figures are converted to U.S. dollars (USD) when collected.

  • Companies are categorized using our own system at Return on Security.

  • Sometimes, the details about deals, like who's in, how much they're investing, or the deal stage, might get updated after we first share the news.

  • Any transactions published for this month that come in later than 10 days after the end of the month may not be captured here.

  • If you spot any errors, just let us know, and we'll fix them.

About Return on Security

Return on Security is all about breaking down the cybersecurity industry for you with expert analysis, hard facts, and real-life stories. Our goal? To keep security pros, entrepreneurs, and investors ahead in a fast-moving field.

Feel free to borrow any data, charts, or advice you find here. Just make sure to give Return on Security a shoutout when you do.

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