💰 Security, Funded #104 - Fundraising Frenzy, Earnings Exceed, & AI's Non-Tight Tightrope 🤹

Hey there,

Happy Monday, and I hope you had a great weekend!

🏃‍♂️ The Rundown

A meta roundup of all the important things affecting cybersecurity and the microenvironment:

• 🚧 Analyzing common cybersecurity startup failures

• 💼 17 companies secure $324.2M across 12 categories

• 🔮 Cybersecurity earnings beat estimates, despite varied guidance

• 💰 Micro-rally ongoing: AI, acquisitions, and non-tight quantitative tightening

It’s starting to look like A Tale of Two Cybers out there.

On one hand, we’ve got trending toward a “return to normalcy.” Buyer expectations, sales pipelines, VC funding, and increased acquisitions are starting to become the norm again. Sales are picking back up, bets made last year in the federal space are starting to pay off, and investors are starting to feel more optimistic about the rest of the year.

On the other hand, however, we’ve got stagnation and decline. Earlier this year, I wrote about the K-Shaped Recovery of the Cybersecurity Industry, and we are just now starting to see this play out. Not everyone is fairing so well, and the market will make them pay for that.

Onward to this week's issue.

📅 YTD Funding

A rolling 12-week chart to compare funding and acquisitions each week between 2022 and 2023.

We’re seeing a bit of a micro-rally right now from a combination of AI-driven funding rounds and acquisitions and quantitative tightening that’s not all that tight.

I’m now also tracking acquisitions week over week and year over year. This will be an interesting one to track, given 2022 falling off a cliff this time last year and 2023 getting to “we are so back” right about now. Shoutout to Josh Trup from Nauta Capital for the inspo on this one!

💰 Funding Summary

• 17 companies raised $324.2M across 12 unique product categories

• 4 companies were acquired or had a merger event for $3.6B across 3 unique product categories

🧩 Funding By Product Category

• $150.0M for Data Privacy across 1 deal

• $66.9M for Machine Learning (ML) Security across 2 deals

• $60.0M for Physical Security across 1 deal

• $21.5M for Fraud and Financial Crime Protection across 2 deals

• $10.0M for SaaS Security Posture Management (SSPM) across 1 deal

• $7.0M for Threat Intelligence across 2 deals

• $6.4M for Cybersecurity Mesh Architecture (CSMA) across 1 deal

• $2.0M for Managed Security Services Provider (MSSP) across 1 deal

• $200.0K for Security and Compliance Automation across 1 deal

• $150.0K for Data Protection across 2 deals

• An undisclosed amount for Threat Detection and Response (TDR) across 1 deal

• An undisclosed amount for Identity and Access Management (IAM) across 2 deals

🏢 Funding By Company

• OneTrust, a United States-based data privacy rights management platform, raised a $150.0M Private Equity Round from Generation Investment Management. (more)

• Solink, a Canada-based cloud video security and surveillance platform, raised a $60.0M Series C from Goldman Sachs Asset Management. (more)

• Protect AI, a United States-based platform for securing your machine learning (ML) workloads, raised a $35.0M Series A from Evolution Equity Partners. (more)

• HiddenLayer, a United States-based platform protecting against adversarial machine learning (AML) attacks, raised a $32.0M Venture Round. (more)

• Trustmi, an Israel-based payment security platform, raised a $17.0M Series A from Cyberstarts. (more)

• Adaptive Shield, an Israel-based SaaS security posture management (SSPM) platform, raised a $10.0M Venture Round from Blackstone. (more)

• Cyclops Security, an Israel-based cybersecurity mesh architecture platform, raised a $6.4M Seed from Merlin Ventures, Insight Partners, TAL Ventures, and toDay.Ventures. (more)

• QuoIntelligence, a Germany-based cyber threat intelligence platform, raised a $5.5M Seed from eCAPITAL ENTREPRENEURIAL PARTNERS. (more)

• Effectiv, a United States-based machine learning (ML) fraud detection platform, raised a $4.5M Seed from Better Tomorrow Ventures. (more)

• ReadiiTel, an Australia-based managed security services provider (MSSP), raised a $2.0M Seed from 1in100 Ventures. (more)

• Data443, a United States-based cyber threat intelligence platform, raised a $1.5M Post-IPO Debt round. (more)

• Medcurity, a United States-based compliance automation platform focused on the healthcare space, raised a $200.0K Funding Round. (more)

• Sovereign Systems, a United States-based queryable encryption-as-a-service platform, raised a $150.0K Funding Round from 500 Global.

• Aembit, a United States-based identity and access workload management platform, raised an undisclosed Seed from  Okta Ventures. (more)

• CryptoLegacy, a United States-based digital asset and NFT protection platform, raised an undisclosed Seed from Fulcrum Venture Accelerator. (more)

• Gem, a United States-based threat detection and response (TDR) platform, raised an undisclosed Seed from Silicon Valley CISO Investments. (more)

• United Effects, a United States-based building block platform for authentication and authorization flows, raised an undisclosed Seed from Fulcrum Venture Accelerator. (more)

🌎 Funding By Country

• $223.2M for United States across 11 deals

• $60.0M for Canada across 1 deal

• $33.4M for Israel across 3 deals

• $5.5M for Germany across 1 deal

• $2.0M for Australia across 1 deal

🤝 Mergers & Acquisitions

• Imperva, a United States-based suite of application, network, and database security tools, was acquired by Thales Group for $3.6B. (more)

• Advantio, an Ireland-based managed security services provider (MSSP), was acquired by Integrity360 for an undisclosed amount. (more)

• Bridge Core, a United States-based managed security services provider (MSSP) focused on the federal space, was acquired by NewSpring Holdings for an undisclosed amount. (more)

• Privatise, an Israel-based secure remote access platform, was acquired by Coro for an undisclosed amount. (more)

📚 Great Reads

• 12 ways to fail a cybersecurity startup - Analyzing the most common reasons cybersecurity startups fail and how to prevent that from Ross Haleiuk.

• *How real-time SBOMs filter vulnerability noise - Engineers hate tickets from security. Prioritize CVEs to avoid investigations tied to code not running. Real-time context helps your team focus on code actually executing, then tie it back to the source.

• What’s the difference between Product Security and Application Security? - Tanya Janca discusses the key differences between Product Security and Application Security and highlights the roles, responsibilities, skills, and knowledge that Product Security professionals need to be successful.

• A framework to securely use LLMs in companies - Part 1 of a multi-part series from Sandesh Anand on using LLMs securely within your organisation. This post provides a framework to categorize risks based on different use cases and deployment types.

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🧪 Labs

✨ Life is what happens between [initial training] and [fine-tuning].