Cybersecurity Startup Gold Rush for Venture Capitalists

According to a PrivCo, a financial data provider on privately held companies, venture capital firms are poised to push $788 million into early stage cybersecurity startups this year. This investment amounts to a 74% increase from last year’s $452 million (note: see this article for more details).

If you follow cybersecurity trends, it’s easy to understand why fat cats are throwing money around. For one thing, the threat landscape continues to become increasingly dangerous. In fact, ESG research indicates that 57% of security professionals working at enterprise organizations (i.e., more than 1,000 employees) believe that the threat landscape is significantly worse or somewhat worse than it was two years ago (Source: ESG Research Report, Advanced Malware Detection and Protection Trends, September 2013). So large organizations clearly need help and there are rich rewards waiting for cybersecurity vendors that can come to their aid – after announcing better than expected financial results, Check Point and Fortinet shares are trading at or near a 52-week high.

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