[This is the second installment of a two-part series on COVID-19's impact on the cybersecurity industry. Read the first part, "Cybersecurity Spending Hits Temporary Pause Amid Pandemic," here].
Not even the traditionally flush cybersecurity venture-capital sector has escaped the economic fallout of the COVID-19 pandemic: New data shows early-stage investment dropped by more than 37% in the first half of 2020. But there are still signs of growth in cybersecurity investment, according to a new analysis of VC deals.
Venture capital firm DataTribe pulled and studied VC deal data from Pitchbook — a VC, private equity, and mergers and acquisitions database platform — to take the temperature of the VC climate in the pandemic.
Mike Janke, co-founder and investment board member of DataTribe, says the downturn in VC spending technically started in 2019 as the saturated threat intelligence sector and other technologies experienced an expected consolidation of vendors and products. "The world doesn't need 72 threat intel feeds. What we've seen over time is very similar to what happened in the endpoint explosion," he says, where once the next-generation endpoint market matured and some of its main vendors — CrowdStrike and Carbon Black (now part of VMware), for example — went public. VC investment has shifted to newer technologies, he says. In his firm, the hot investments now include cloud security, secure containers, artificial intelligence, and industrial homomorphic encryption, for instance.
Janke says "certain pockets" of newer cybersecurity technologies are driving investments. "Across our portfolio, they are beating pre-COVID 2020 estimates, which sho ..
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