💰 Security, Funded #72 - A Big Week for Earnings, Mo Managed Services, and The Best Way to Make Money in Crypto

Hey there,

I hope you had a great weekend!

In this week's issue:

• Big earnings week
• Mo Managed Services
• The best way to make money in crypto

It was another big week for earnings reports of publicly traded cybersecurity companies. Here are a few highlights:

• Okta ($OKTA) went up 17% after they beat their earnings guidance and increased revenue 37% year-over-year
• CrowdStrike ($CRWD) beat their earnings guidance and revenue but had one of it's worst quarters since going public and cut their forward looking guidance
• Secureworks ($SCWX) saw a dive after they reduced their earnings guidance with quarterly revenue was down 13.4% on a year-over-year basis
• Zscaler ($ZS) dropped 10% even after beating their expectations

These publicly traded cyber companies had a few themes in common across their earnings calls. They all saw some flavor of:

• Longer sales cycles overall
• Longer customer deployment timelines (meaning slower revenue recognition)
• Less demand in the small to medium enterprise (SME) space
• More large account demand and bigger contracts
• More spending from the US federal sector
• More international sales
• Clients wanting to consolidate vendors and more operational efficiency
• Projecting lower growth and revenue for next quarter
• Financial analysts wanting to see more growth

Macro pressures have finally hit the heavyweights in the cybersecurity space, but in a lumpy way. The public heavyweights are being pulled in different ways and the strain is going to have a ripple effect for smaller and earlier stage cyber companies.

So what do these updates signal for current and future cybersecurity buyer and investor trends? My prediction is...

More 👏 Managed 👏 Services 👏

The more one-stop-shop and managed the solutions are, the better. Customers will be more willing to consolidate vendors, buy more managed services, spend through cloud-based marketplaces (e.g., AWS Marketplace), and spend more with the vendors they have for deeper discounts.

Security leaders will be challenged to make most of budget and resource constraints that are likely to extend through 2024 (on top of what might have already been present).

Onward to this week's issue.

🗣️ Sponsor

💰 Funding Summary

• 14 companies raised $149.0M across 14 unique product categories
• 5 companies were acquired or had a merger event across 3 unique product categories

🧩 Funding by Product Category

• $31.0M for Identity Risk Management (IRM)
• $26.0M for Cloud Security
• $25.0M for Passwordless Authentication
• $18.5M for Cybersecurity Education & Training
• $15.4M for Fraud and Financial Crime Protection
• $8.0M for Threat Detection and Response (TDR)
• $5.9M for Managed Security Services Provider (MSSP)
• $5.1M for Data Protection
• $4.6M for Endpoint Detection and Response (EDR)
• $4.0M for Blockchain Security
• $2.6M for Security Awareness
• $1.9M for Secure Communications
• $1.0M for Hardware Security
• An undisclosed amount for Secure Networking

🏢 Funding By Company

• SPHERE Technology Solutions, a United States-based identity risk management and remediation platform, raised a $31.0M Series B from Edison Partners. (more)
• Pangea, a United States-based API platform for secure cloud infrastructure deployments, raised a $26.0M Series B from GV. (more)
• HYPR, a United States-based passwordless authentication company, raised a $25.0M Series C from Advent International. (more)
• RangeForce, a United States-based cyber defensive education and training platform, raised a $18.5M Venture Round.
• FrankieOne, a Australia-based fraud prevention and data aggregation platform, raised a $15.4M Series A from AirTree Ventures and Greycroft. (more)
• CyVers, a Israel-based threat detection and response (TDR) platform for protecting against crypto and DeFi attacks, raised a $8.0M Funding Round from Elron Ventures. (more)
• GoSecure, a United States-based managed security services provider (MSSP), raised a $5.9M Venture Round
• CAST AI, a United States-based AI-driven cloud optimization and disaster prevention platform, raised a $5.1M Debt Financing Round.
• CrowdStrike, a United States-based endpoint detection and response (EDR) platform, raised a $4.6M Post-IPO Equity from ARK Investment Management.
• Nucleo, a United States-based blockchain security and privacy platform, raised a $4.0M Seed from Bain Capital Crypto. (more)
• Arsen, a France-based phishing simulation and training platform, raised a $2.6M Seed from Elaia. (more)
• RiPSIM Technologies, a United States-based secure software defined cellular network platform, raised a $1.9M Venture Round.
• Cypherock, a Singapore-based hardware wallet with decentralized keys for storing crypto, raised a $1.0M Seed. (more)
• Pantherun Technologies, a India-based encryption-in-use network platform, raised anundisclosed Non-Equity Assistance Round from Qualcomm Semiconductor Mentorship Program.

🌎 Funding By Country

• $122.0M for United States 🇺🇸
• $15.4M for Australia 🇦🇺
• $8.0M for Israel 🇮🇱
• $2.6M for France 🇫🇷
• $1.0M for Singapore 🇸🇬
• An undisclosed amount for India 🇮🇳

🤝 Mergers & Acquisitions

• Advance Computer Services Ltd, a United Kingdom-based managed services provider (MSP), was acquired by Bechtle AG for an undisclosed amount. (more)
• GK8, a Israel-based cryptographic key and wallet management platform for financial services, was acquired by Galaxy Digital for an undisclosed amount. (more)
• One Source, a United States-based managed services provider (MSP), was acquired by Genesis Park for an undisclosed amount. (more)
• Secomba GmbH | Boxcryptor, a Germany-based file and folder encryption platform, was acquired by Dropbox for an undisclosed amount. (more)
• Sensato, a United States-based professional services firm focused on penetration testing and risk assessments, was acquired by CloudWave for an undisclosed amount. (more)

🔐 Secure The Job

Return on Security Job Board

Browse the jobs I curate each week and apply for what matches your interests.

Post a role and request access to start meeting world class candidates open to new opportunities. Learn more or request access here.

📊 Industry News

• Canada to boost cyber and military defense to deter China (more)
• Meta Fined $276 Million in Europe for Data-Scraping Leak (more)
• Germany Forces a Microsoft 365 Ban Due to Privacy Concerns (more)

📚 Great Reads

• Angel investing in cybersecurity - A practical deep dive into angel investing in cybersecurity that covers the basics, investment math, and ways to get started.
• Defending Upstream - Securing Supply Chains for the Industrial Internet of Things.
• A Security Tools Crash Is Coming - Security teams want less tools not more and are already overwhelmed with noise from their current tools, all trying to justify their value by firing off alerts and issues.

🗣️ Sponsor

🧪 Labs

I jumped on the OpenAI train this week and asked DALL-E 2 to make a picture of me using the first prompt that came to my mind and I've never looked better:

"A chief information security officer with a beard who writes a newsletter, pixel art, la noir”

👋 Thanks

Have questions, comments, or feedback about this issue? I'd love to hear from you. Reach out on Twitter or reply directly to the newsletter version of this issue.

Thanks for reading and see you again next time!

Cheers,

Mike P