The red-hot venture capital (VC) investment trend for cybersecurity start-ups turned white hot during 2019, with the number of investments deals in “pure-play” cybersecurity companies soaring from 2018 levels. According to one set of numbers, the Venture Monitor report produced by Pitchbook for the National Venture Capital Association (NVCA), the cybersecurity sector is attracting “unprecedented levels of VC deal-making.”
The goal of all this deal-making is to cash out wisely when companies are either acquired or go public on the stock exchange. Like VC spending, 2019 was a major year for cybersecurity acquisitions, with more than 150 deals totaling more than $23 billion taking place.
The NVCA data, however, shows a downtick in total venture investment in cybersecurity start-ups from 2018 to 2019, from around $6.5 billion to around $5 billion. That slip is consistent with a PwC/CBInsights report on 2019 venture spending, which doesn’t break out spending for the cybersecurity sector separately but shows overall venture investing falling toward the end of the year, with year-over-year spending levels dropping by 9% to $108 billion.