The pandemic has borne witness to a proliferation of hacks, malware and phishing attempts surfacing as people work from home, with Covid-19 shining a light on the inadequate security practices of many companies. With workers across the globe away from their offices, cyber threats are now outside of a business’ premises. Organisations are questioning whether they should continue leasing expensive office space post-pandemic, meaning technologies that tackle remote work threats are ones to watch out for.
As such, the cybersecurity industry is looking fruitful. Cyber startups, according to the LORCA Report 2020, raised a record half billion in the first six months of 2020 in the UK, with the Coronavirus pandemic appearing to have been responsible for catalysing a 940% increase in cyber funding compared to the same period last year.
Investment has also shifted; the saturated threat intelligence sector and other technologies underwent an expected consolidation of vendors and products. As a result, VC investment is changing focus towards newer technologies across cloud security, secure containers, AI and encryption. We took a look at five of the best venture capital firms making moves on the cyber security industry.
After co-founding Aspect Ventures as a rare woman-led venture capital fund in Silicon Valley, Theresia Gouw launched new fund Acrew Capital in 2019, with backers including philanthropist Melinda Gates. Led by a group of former Aspect employees, the firm pursues an early-stage investment approach with a focus on team and multi-generational firm-building.
The firm closed its debut fund last December with $250 million in capital commitments. So far, Acrew has made six investments, including in digital and challenger banks Chime and Klar, and Augtera Networks, which helps enterprises automate their network operations. Its main focuses looking ahead are cybersecurity, financial services, the future of work and interconnected data. Gouw is an expert in the cybersecurity space.
Ten Eleven is a specialised venture capital firm which is exclusively dedicated to helping cybersecurity companies to grow and succeed. It prefers to focus on early stage and growth investments in private companies that are poised to lead the digital security field.
Founded in 2014 by security entrepreneur and investor Alex Doll, a co-founder of email and data encryption software company PGP Corp, the firm offers portfolio companies capital, counsel and connections in the cybersecurity field. It has made investments in companies including Darktrace, Digital Shadows and Vulcan Cyber, and exited investments such as Hexadite and Ping Identity.
Energy Impact Partners
This investment firm focuses on companies optimising energy consumption and improving sustainable energy generation, but sees cybersecurity as a top priority for the energy sector, given the potential economic and human safety impact of an outage to critical infrastructure.
The VC has raised three funds so far, their latest being Energy Impact Fund II in August 2019, which raised a total of $405 million. EIP has described itself recently as having ‘protection of critical infrastructure’ at the heart of its mission to help innovators transform asset intensive industries. The firm wants to address the issue of infrastructure globally, including power generation and transmission lines, communicating networks and data centres, suffering devastating cybersecurity attacks, and the way that Covid-19 has changed the type of attack.
Its recent investments include cybersecurity simulation and skills analysis platform RangeForce, and cybersecurity company Attivo Networks, as it looks to expand its portfolio of energy sector-specific deception technology.
Founded in 1996, London-based venture capital firm Index Ventures, which also has headquarters in San Francisco, boasts IPOs including the likes of Dropbox and Sonos, as well as Zuora, Elastic, Adyen and Farfetch. Its exits include the likes of Just Eat and Skype. It has also invested in a number of unicorns, including Revolut, Deliveroo and BlaBlaCar in Europe and Slack and Squarespace in the US.
The firm aims to invest in technology-enabled companies with a focus on e-commerce, fintech, mobility, gaming, infrastructure/AI, and security, and is lately interested in the fact that the onset of the global Covid-19 pandemic will revolutionise SMEs’ cyber security practices. As such, Index Ventures has announced it will invest $2 billion in ‘innovation via adversity’ in two new funds. These new funds will focus on ‘those that are fundamentally transforming the way we live and work, as well as those providing the enterprise infrastructure and AI to underpin these changes in society and the economy’.
Last, but by no means least, early-stage VC firm Crosslink Capital, which was founded in 1989, has over $1.3 billion assets under management. It partners with market disruptors and category creators, usually at the Seed-Series A stage, across dynamic enterprise and consumer technology sectors. Historically, the firm has invested in companies such as Bleacher Report, Chima, DataStax and Molecule.
Crosslink sees cybersecurity as a key area in any industry, and one which is deservedly receiving intense focus from an investor’s point of view. The firm recently invested in Verodin, a company deploying leading threat intelligence and front-line incident response data with a continuous security validation platform.
If you are a VC firm with an interest in the cyber-security industry, get in touch today.
