March 3, 2022

Momentum Cyber’s Cybersecurity Almanac 2022

Momentum Cyber’s Cybersecurity Almanac 2022

Momentum Cyber is an investment bank that deals with only cybersecurity companies and is headed by Dave DeWalt.

 

According to their website, they analyzed data from over 3,500 cybersecurity companies across the globe and strategic deal activity including IPOs, mergers and acquisitions (M&A), venture capital and private equity financings, and the market impact of news and events. This Almanac chronicles the key trends in the industry that made 2021 a landmark year with record smashing numbers like these.

$77.5 billion in M&A volume

$29.3 billion in PE & VC investments

 

After deep diving into the information, here are my 5 key takeaways. 

 

1) The cybersecurity space is more crowded than ever

Right now we’re at a place where you’ll see one marketplace slide for the cybersecurity market broken out into different markets with about 6,500+ vendors. 

Robert Herjavec, CEO of Herjavec Group, a global IT security firm, and star on Shark Tank, put it this way. Imagine having to make decisions in this mess and being a security leader and wondering what the heck do I do with all of this! Just try to imagine having to make it all work together, it’s a tough position to be in.

It is crowded, so what should you pay attention to? 

The answer is not…pay attention to the “if” you can protect yourself.  You can.  There are tools to protect yourself.

Focus on the “how”.  How will you protect yourself with your budget and what’s out there in a way that’s going to deliver an effective program?



2) There's a huge growth in financing activity right now

People have said it has slowed down and it's not the same as it used to be, but if you look at the numbers, in 2021 over 2020 there was a 43% growth in financing to 1,042 individual financing.

 

Some of the top segments (number of financing taking place) were risk and compliance at the top with 16%  and then data security, IAM, network & infrastructure security. Compared to the number of dollars, other names like cloud security come up which was 8th in terms of numbers of financing. But, in terms of volume, you’re looking at Cloud, IAM, endpoint, risk and compliance, and data security. 

 

3) Public markets value growth over margins, by quite a lot

Even though they’re in the public space they want to see that top line grow. This is a good proxy for private companies and those leading teams and talking to boards will get this information. 

 

4) The Almanac includes interesting facts such as amount of money going into companies and stock 

The amount of money going into companies right now is incredible! 

The top 15 funded companies have raised $12.9 billion dollars. That's roughly speaking, 900M on average towards the top 15 (such as Lacework, Netskope, Rubrik, Onetrust, Fire Blocks, Tanium, Orca, Cybereason, Plume etc). 

The next 45 have all raised over $100 million (transmit, (543), arctic wolf (535), Cato (532), Acronis (421)). 

Also, stock is nice to have but be sure to understand their financing or your stock, because even with a big exit, it might not be worth much. So, be sure you understand your opportunities. 



5) Product Lead Growth is growing and continually getting established 

We grew up in an enterprise world, but now we’re in a space where the product is bringing in the sales. It’s hard to optimize product lead growth and it’s now rather than sales people bringing in the sales it's allowing the product to drive sales. Companies such as Snyk, Rumble, and Bluescape are leading examples of this. 

There were also some quick interesting takeaways such as how ransomware isn’t going away anytime soon, if anything it’s increasing and how the skills shortage will continue to be a problem. Another interesting fact is how in a world where things are interconnected - 3rd party risk is a big thing, for example, 63% of breeches have come through some form of 3rd parties. 

We hope you were able to learn something from my 5 biggest takeaways from this year’s Momentum Cyber’s Cybersecurity Almanac. If you’d like to read the Almanac yourself, it is available for download on their website.