💰 Security, Funded #161 - A is for Series Awesome

Get cybersecurity market and intelligence insights, including key trends and industry analysis, for the week of September 9, 2024.

Author

Mike Privette
September 16, 2024 • Reading Time: 11 minutes

Security, Funded is a weekly deep dive into the financial transactions, industry news, and economic activity from the cybersecurity market. This week’s issue is presented together with Nudge Security and Material Security.

Hey there,

I hope you had a great weekend!

There were some colder temperatures here in the UK last week, but that might have just been US inflation data cooling off a bit. The August US Consumer Price Index (CPI) report showed the 12-month inflation rate at 2.5%, down from July and the lowest since February 2021.

That’s an important figure because we now wait to see if the US Federal Reserve will lower interest rates next week and, if so, by how much. Lower interest rates are better for the industry because borrowing, lending, funding startups, and hiring talent are cheaper for all parties involved.

Onward to this week's issue.

TOGETHER WITH

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😎 Vibe Check

If money wasn't an issue, what is the first thing you would prioritize spending on for your security program?

Bonus points if you tell me why!

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Last issue’s vibe check:
What's your biggest threat or risk you are focusing on now for your organization?
🟨🟨🟨🟨⬜️⬜️ ☣️ Ransomware defense (10)
🟨🟨🟨⬜️⬜️⬜️ ⛈️ Cloud security and guardrails (7)
🟨🟨⬜️⬜️⬜️⬜️ 🛠️ SaaS and AI tool sprawl (5)
🟨⬜️⬜️⬜️⬜️⬜️ 📀 Data loss prevention (4)
🟩🟩🟩🟩🟩🟩 🫣 Application security (14)
🟨🟨⬜️⬜️⬜️⬜️ 3️⃣ Third-party or supplier risk (5)
⬜️⬜️⬜️⬜️⬜️⬜️ 🔮 Other (tell me) (2)
47 Votes

There was a pretty distributed response to last week’s poll, but most people are currently focused on Application Security and Ransomware defense. Cloud security also made a notable appearance.

Some of the top comments from last week:

“Other - All of them.”

💰 Market Summary

  • 12 companies raised $168.0M across 10 unique product categories in 3 countries

  • 5 companies were acquired or had a merger event for $2.7B across 5 unique product categories

  • 93% of funding went to product-based cybersecurity companies

  • 1 public cyber company had an earnings report

📸 YoY Snapshot

This is a rolling 12-week chart comparing funding and acquisitions each week in a year-over-year (YoY) view between 2023 and 2024.

A healthy dose of Series A and earlier stage rounds last week signaling that we are on the way back, baby!

Not to be outdone by funding, there was some high-quality action on the M&A front last week as well. Interestingly enough, however, with only a few weeks left in Q3, overall transaction volume is down roughly 42% compared to Q3 2023.

🤙 Earnings Reports

Cyber Market Movers

As of market close September 13, 2024

Earnings reports from last week: Rubrik

Rubrik (RBRK)

  • This was Rubrik’s very first earnings call after going IPO earlier this year, and by all accounts, it was seen as a successful transition from private to public.

  • Rubrik focused the conversation on the company's transition from being “just a backup and recovery company” to offering a full data security suite.

  • Rubrik said it hit $900 million in ARR and plans to hit $1 billion by the end of the year, and analysts expressed positive sentiment towards Rubrik’s positioning overall.

Macro Context:

  • Public markets are pricing in a positive signal for the coming week when the US Federal Reserve plans to announce just how deep its interest rate cut will be and possibly signal what future cuts might look like.

  • Fortinet’s stock barely saw a blip on the radar even after it confirmed a data breach involving customer data. Markets don’t care about security breaches 🤷‍♂️

  • Palo Alto has now completely recovered the ground it lost after the controversial decision to focus on “platform” over “best of breed,” a move that made many investors and analysts alike act a fool. 🙄 

Earning reports to watch this coming week:

  • None

🧩 Funding By Product Category

  • $55.0M for Threat Intelligence across 1 deal

  • $25.0M for Identity and Access Management (IAM) across 1 deal

  • $24.6M for Application Security across 2 deals

  • $17.2M for Continuous Threat Exposure Management (CTEM) across 2 deals

  • $15.0M for Secure Remote Access across 1 deal

  • $11.0M for Managed Security Services Provider (MSSP) across 1 deal

  • $10.0M for Cloud Native Application Protection Platform (CNAPP) across 1 deal

  • $5.0M for Security Analytics across 1 deal

  • $3.2M for Cyber Insurance across 1 deal

  • $2.0M for Artificial Intelligence (AI) Security across 1 deal

🏢 Funding By Company

🌎 Funding By Country

  • $150.8M for the United States across 10 deals

  • $12.2M for France across 1 deal

  • $5.0M for Israel across 1 deal

🤝 Mergers & Acquisitions

  • Recorded Future, a United States-based cyber threat intelligence platform, was acquired by Mastercard for $2.7B. (more) (this marks the third cyber acquisition from Mastercard!)

  • Axcient, a United States-based data protection and business continuity service, was acquired by ConnectWise for an undisclosed amount. (more)

  • Difenda, a Canada-based managed security services provider (MSSP) focused on the Microsoft Security product suite, was acquired by Quorum Cyber for an undisclosed amount. (more)

  • PureID, a United States-based passwordless authentication platform, was acquired by ColorTokens for an undisclosed amount. (more)

  • White Rook Cyber, a Australia-based professional services firm focused on penetration testing and cybersecurity assessments, was acquired by Screwloose IT for an undisclosed amount. (more)

📚 Great Reads

*A message from our sponsor

🧪 Labs

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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 system at Return on Security, and we write all 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.

  • Let us know if you spot any errors, 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.

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