Cybersecurity Market Update: March 2024 Insights & Trends

Dive into March 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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Table of Contents

March 2024 Highlights

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

  • March 2024 marked the first month of the year to surpass $1.0 billion in cybersecurity investment, signaling a much-needed rebound in the industry (however temporary it may be). The last time the cybersecurity industry saw a month surpass the billion-dollar funding mark was back in October 2023.

  • March 2024 also continued the high-profile acquisition trend that started early in the year and surpassed the number of transactions for the same time last year.

⚠️ 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.

By the Numbers

In contrast to earlier months, March showed signs of a recovery in 2024, with funding surging to $1.1 billion. This is up from a low of $489.7 million during the same time in 2023.

Funding Insights

In March 2024, a substantial $1.1 billion was invested across 61 events in 34 unique cybersecurity product categories, with a heightened focus on critical infrastructure and emerging technologies.

Leading the pack, Attack Surface Management (ASM) secured $233 million across two events, accounting for 21.3% of total funding. As generative AI accelerates the speed of application development and cloud resource usage, so too increases the speed of misconfiguration and attackers ready to abuse available services.

Following closely, Operational Technology (OT) Security grabbed $200 million, also from two events, making up 18.3% of the total for March. Data Protection was the most funded product category in March with six events, and brought in $83.8 million or 7.7% of the funding.

Global Funding Distribution

In March 2024, the cybersecurity sector experienced significant global investment activity, with companies from 16 countries securing funding. Leading the charge, American firms captured approximately 57% of total funding, amounting to $751.7 million across 35 events. Israel also made notable contributions, securing $133 million through just two events, representing 3.3% of the total investments. French companies raised $87.2 million from four events, contributing 6.6% to the global funding pool.

Additionally, the Netherlands and India were key players. Dutch companies raised $39.4 million in a single event, accounting for 1.6% of the total, while Indian firms secured $27.4 million from two events, also comprising 3.3% of the overall investments.

Mergers & Acquisitions

On the cybersecurity M&A front for March 2024, two high-profile acquisitions out of Israel stole the show. Gem Security and Avalor each secured $350 million, representing 5.6% of the total M&A activities. Threat detection and security analytic capabilities continue to be in high demand.

Professional Services dominated in terms of event count, with five transactions making up 27.8% of the activities. This shows that services-based businesses, which are often avoided by venture capital investors, are still ripe for acquisition targets, an ongoing trend from 2022.

Application Security was also a significant focus, with two events representing 11.1% of total M&A activities, underscoring the ongoing importance of securing applications against emerging threats. This uptick has likely been driven by the rise of generative AI and LLM use cases, both for and against AppSec.

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.

  • Walter's War Podcast - 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, pathological lying, defense tech, the metaverse, and more.

  • Pushing Innovation with Apology Budgets - Andy Ellis discusses the concept of "apology budgets" to encourage risk-taking and innovation within cybersecurity teams and garner the support of your partner teams.

  • What Motivates People to Trust 'AI' Systems? - This study analyzes the motivations behind people's trust in AI systems. It identifies four main rationales for trust: human favoritism, Black box, OPSEC, and 'Wicked world, tame computers,' or a belief in AI's ability to navigate complex issues better than humans.

  • Cloud Security Maturity Model 2.0 - Rich Mogull worked with IANS to release version 2.0 of the Cloud Security Maturity Model, which is a big update from the original released in 2020 with around 100 cloud security control objectives to use as Key Performance Indicators (KPIs).

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.

  • Company country locations are pulled from publicly available sources.

  • Companies are categorized using our own system at Return on Security, and we write all of the company descriptions.

  • Sometimes, the details about deals, like who led the round, how much money was raised, or the deal stage, might get updated after the issue is first published.

  • If you spot any errors, 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. The goal? To keep security pros, entrepreneurs, and investors ahead in a fast-moving field. Read more about the “Why” here.

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

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