💰 Security, Funded #92 - YTD Funding Down Bad, Passwords Phasing Out, and The Great Financial Clappening™️

Hey there,

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

Trying something different this week with a list of takeaways from this issue:

🎯 Quick Takeaways:

• Fortinet's Q1 growth
• Passwords phasing out
• YTD funding is still down bad
• 11 companies raise $176M
• 6 M&A events, $100M
• Prioritization & Loneliness
• The Great Financial Clappening™️
• Feeling like a king🤴🏽

Let me know what you think about this! 👆️

The Great Financial Clappening™️ continues on with PacWest bank on the brink of collapse, the US Fed hikes interest rates another 25 bps (see above), Samsung banned staff from using ChatGPT, The SEC paid out its largest-ever award to a whistleblower at ~$279M 🤯, and feeling like a king.

Onward to this week's issue.

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🔮 Earnings Reports 🆕

I’m making this into a separate section now where there are significant earnings reports, let me know what you think!

• Fortinet ($FTNT) - stock surged >6% after the Q1 earnings update, where billings and revenue were up 30% from last quarter. Fortinet cites their growth to increased demand for SASE (Secure Access Service Edge or a traditional VPN replacement) and broader cost-saving plays for new and existing customers.

The takeaway: Even though Q1 is seeing a growth rebound for some cyber companies, buyers are still preceding with caution and leaning further into digital transformation so long as it aligns with cost-savings (lower TCO) over features.

🛞 Industry News Roundup

• So long passwords, thanks for all the phish (more)
• Merck’s Insurers On the Hook in $1.4 Billion NotPetya Attack (more)
• Former Uber CSO Joe Sullivan Avoids Prison Time (more)

📅 YTD Funding

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

Last week’s drop was more than just a delayed marketing tactic to avoid the noise of RSA, it was a look into how the market is shaping up this year. As you can see from this week’s chart, there is still a huge divergence from last year at this time. I do expect these numbers and the volume of deals to creep up over the next few weeks, however.

💰 Funding Summary

• 11 companies raised $176.0M across 10 unique product categories
• 6 companies were acquired or had a merger event across 5  unique product categories for $100.0M

🧩 Funding By Product Category

• $65.0M for Managed Services Provider (MSP) across 1 deal
• $40.0M for Fraud and Financial Crime Protection across 1 deal
• $30.0M for Passwordless Authentication across 2 deals
• $16.0M for Confidential Computing across 1 deal
• $8.8M for Security Awareness across 1 deal
• $6.0M for Internet Security across 1 deal
• $4.5M for Application Security across 1 deal
• $4.4M for Data Privacy across 1 deal
• $1.2M for Secure Remote Access across 1 deal
• An undisclosed amount for Data Access Governance across 1 deal

🏢 Funding By Company

• Sourcepass, a United States-based managed services provider (MSP), raised a $65.0M Venture Round from Metropolitan Partners. (more)
• BioCatch, an Israel-based digital identity verification and fraud protection platform, raised a $40.0M Secondary Market from Permira. (more)
• Token, a United States-based wearable biometric authentication device, raised $30.0M, $20.0M in Debt Financing and a $10.0M Convertible Note from Grand Oaks Capital. (more)
• HUB Security, an Israel-based confidential computing platform, raised a $16.0M Post-IPO Equity from The Lind Partners. (more)
• CultureAI, a United Kingdom-based security awareness and training platform, raised an $8.8M Seed from Conviction VC, Passion Capital, and Senovo. (more)
• SquareX, a Singapore-based consumer internet security and privacy platform, raised a $6.0M Seed. (more)
• Aiden, a United States-based application security platform focused on Microsoft Windows organizations, raised a $4.5M Seed from Right Side Capital Management and Blu Ventures Investors. (more)
• Kertos, a Germany-based data privacy platform, raised a $4.4M Seed from Redstone. (more)
• NetBird, a Germany-based open-source secure remote access platform, raised a $1.2M Pre-Seed from Antler. (more)
• Immuta, a United States-based cloud-native data access governance platform, raised an undisclosed Venture Round from Databricks Ventures. (more)

🌎 Funding By Country

• $99.5M for United States across 5 deals 🇺🇸
• $56.0M for Israel across 2 deals 🇮🇱
• $8.8M for United Kingdom across 1 deal 🇬🇧
• $6.0M for Singapore across 1 deal 🇸🇬
• $5.6M for Germany across 2 deals 🇩🇪

🤝 Mergers & Acquisitions

• Maltego Technologies, a Germany-based open-source intelligence (OSINT) platform, was acquired by Charlesbank Capital Partners for $100.0M. (more)
• Definitive, an Ireland-based managed services provider (MSP), was acquired by Nostra for an undisclosed amount. (more)
• Okera, a United States-based data access governance platform, was acquired by Databricks for an undisclosed amount. (more)
• PROXIOS, a United States-based managed security services provider (MSSP), was acquired by Sourcepass for an undisclosed amount. (more)
• Venyu Solutions, a United States-based managed security services provider (MSSP), was acquired by DartPoints for an undisclosed amount. (more)

📚 Great Reads

• Security's eternal prioritisation problem - What if the task I deprioritised leads to a breach that blows everything up? This is a question that's gone through every Security leader's mind.
• DEF CON to set thousands of hackers loose on LLMs - This year's DEF CON AI Village has invited hackers to show up, dive in, and find bugs and biases in large language models (LLMs) built by OpenAI, Google, Anthropic, and others.
• Loneliness Epidemic: When Your Only Friend is Over Your VPN - The latest issue of Vulnerable U from Matt Jay - From IRC to Zoom: How we've become more connected, yet more alone.

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