💰 Security, Funded #183 - The Shutdown Blues

Get cybersecurity market and intelligence insights, including key trends and industry analysis, for the week of February 24, 2025.

Author

Mike Privette
March 03, 2025 • Reading Time: 11 minutes

Security, Funded provides a weekly analysis of economic activity in the cybersecurity market. This week’s issue is presented together with Harmonic Security.

Hey there,

I hope you had a great weekend!

Another big week in the industry with huge funding rounds, craziness on the threat intelligence front, and a whole lot of political tensions. Maybe grab another coffee to get locked in for this issue.

In brighter news, it’s that time of year already when party invites for big conferences like RSA are starting to roll out. This year, I’m happy to share that Return on Security will be cohosting a few after-party events at RSA, and here is the first one:

Join us if you are a product manager, early-stage founder, security engineer, or someone involved in developing a security product or initiative!

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I’ll announce the second one as soon as the details get finalized, but I hope to see you there!

Also, this was the best response last week, with five bullet points showing what you accomplished that increased shareholder value:

This is the big-brain thinking we need 🧠

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😎 Vibe Check

Whether you’re a security leader, product builder, or investor, what’s holding back AI in cybersecurity?

Login or Subscribe to participate in polls.

Last issue’s vibe check:
How is your team improving detection & response this year?
🟨🟨🟨⬜️⬜️⬜️ 🛠️ Consolidating tools (6)
🟩🟩🟩🟩🟩🟩 💼 Outsourcing to MSSPs (10)
🟨🟨🟨⬜️⬜️⬜️ 🧑‍💻 Upskilling internal teams (6)
🟨🟨🟨🟨⬜️⬜️ 🤖 Investing in automation & AI (8)
30 Votes

Last week, the top response for improving detection and response was outsourcing to MSSPs. This makes a lot of sense, as MSSPs and MDR providers have become more appealing due to budget constraints and hiring freezes over the past few years. The same sentiment can be seen in funding, as MSSPs and MDR providers have accounted for roughly $4 billion in funding over the last three years.

Investing in automation and AI was a close second, but it is likely not yet a significant game-changer for most teams. There’s still work to be done.

Some of the top comments from last week’s vibe check:

Outsource - “Just too hard to staff and retain a full 24/7 SOC with the budget they gave me.”

Consolidate - “Hopefully, it'll improve visibility, though a lot of the team will have to learn another SIEM language... again.”

💰 Market Summary

  • 11 companies from 5 countries raised $407.1M across 11 unique product categories

  • 2 companies were acquired or had a merger event for $37.5M across 2 unique product categories

  • 99% of funding went to product-based cybersecurity companies

  • No public cyber companies had an earnings report

Public Market Moves

As of markets close February 28, 2025

📸 YoY Snapshot

This is a rolling 12-week chart comparing funding and acquisitions each week in a year-over-year (YoY) view between the end of 2023 and the start of 2024 and 2025.

Click to see a larger version

One huge funding round last week brought the total for the year to nearly $2.5 billion, which is up 20% from last year.

Click to see a larger version

Steady consistency on the M&A front this year, still moving ahead at a stronger clip than 2024. One acquisition last week was quite different than the norm in the industry (see below).

☎️ Earnings Reports

Earnings reports from last week: None

Earning reports to watch this coming week: CrowdStrike, Okta, Zscaler

🪦 Stop, Drop, Shut’em Down…

  • Skybox Security, a United States-based network security posture management platform founded in 2002, abruptly shut down its operations last week after previously raising $334.8M in funding. (more)

🧩 Funding By Product Category

Click to see a larger version

  • $500.0M for Endpoint Protection across 1 deal

  • $50.0M for Threat Detection and Response (TDR) across 1 deal

  • $29.0M for Cloud Native Application Protection Platform (CNAPP) across 2 deals

  • $14.0M for AI Adversary Simulation across 1 deal

  • $12.0M for Application Security Posture Management (ASPM) across 1 deal

  • $10.0M for Security Awareness across 1 deal

  • $5.0M for Trust & Safety across 1 deal

  • $3.0M for Professional Services across 1 deal

🏢 Funding By Company

Product Companies:

Service Companies:

  • CQR, a Saudi Arabia-based professional services firm focused on operational technology (OT) security, raised a $3.0M Seed from Shorooq Partners. (more)

🌎 Funding By Country

Going to need to squint to see this one!

  • $620.0M for the United States across 8 deals

  • $3.0M for Saudi Arabia across 1 deal

🤝 Mergers & Acquisitions

Product Companies:

  • Skybox Security, a United States-based network security posture management platform, was acquired by Tufin for an undisclosed amount. This was an asset sale that coincided with the company closing operations. Skybox Security closed its operations after having previously raised $334.8M in funding. (more)

Service Companies:

  • Globalnet Connect, a United States-based professional services firm focused on building cybersecurity programs, was acquired by  Amplix for an undisclosed amount. Globalnet Connect has not publicly disclosed any funding events. (more)

  • Northeast MSP, a United States-based managed security services provider (MSSP), was acquired by AYCE Capital for an undisclosed amount. Northeast MSP has not publicly disclosed any funding events. (more)

📚 Great Reads

*A message from our sponsor

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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.

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.

Thank you for reading. If you liked this analysis, please share it with your friends, colleagues, and anyone interested in the cybersecurity market.

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